Research in Motion reports decline in earnings
Hurt by increased competition and the lack of new hit products, BlackBerry maker Research in Motion reported disappointing first-quarter earnings. And the company lowered its outlook below Wall Street expectations, sending its shares plummeting.
The Canadian smartphone maker also plans to slash an unspecified number of jobs from its workforce as it continues to struggle with production delays and decreased demand, the company said in a statement.
RIM reported profit of $695 million, or $1.33 per share, for the three months that ended May 28, compared with $769 million, or $1.38 per share, in the same period last year. For the current quarter, it forecast earnings of 75 cents to $1.05 per share, falling below analyst expectations of $1.36 per share.
The company also sharply lowered its annual earnings outlook to a range of $5.25 to $6 per share, down from an April forecast of $7.50 per share.
“The slowdown we saw in the first quarter is continuing,” Jim Balsillie, RIM’s co-chief executive, said in the statement. “Delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.”
Anil Doradla, a technology analyst with investment firm William Blair & Co. in Chicago, said that RIM’s BlackBerry is continuing to lose market share to the iPhone and smartphones running on Google’s Android operating system.
“As a result, RIM did not have a smartphone in the top three positions at any of the four major North American carriers,” Doradla wrote in a Thursday note to investors. “Additionally, during the quarter RIM saw significant price cuts at AT&T and Sprint.”
RIM said it would focus on “taking out redundancies” in the current quarter, including cutting jobs.
Earlier on Thursday, the company announced that Don Morrison, its chief operating officer, was going on medical leave.
The earnings data were released after the markets closed. RIM shares fell nearly 15% to $30.13 in after-hours trading Thursday.
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