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June 17, 2011 12:41 am
The shares were down as much as $5.73 to $29.60 in after-hours trading in New York after the news, which followed an earlier profit warning in April. The stock has lost 39 per cent of its value this year.
The Canadian company is facing rising competition for its ageing smartphones from Apple’s iPhone and handsets running Google’s Android operating system, and suffered a poorly received launch of its PlayBook tablet computer.
RIM reported net profits of $695m, or $1.33 a share, on revenue of $4.9bn for the first quarter. Analysts had expected profits of $1.32 a share on revenue of $5.1bn.
The company shipped 13.2m BlackBerrys in the quarter, and a better than expected 500,000 PlayBook tablets in the six weeks after the launch, against expectations of 13.6m BlackBerrys and 366,000 Playbooks. RIM said it was “in the final stages of a product transition” with new BlackBerrys to be launched this quarter.
RIM has come under increasing scrutiny from investors after losing market share. Last week, Northwest & Ethical Investments called for RIM to separate the roles of chairman and chief executive. However the co-chiefs firmly rejected the call, saying they had no plans to change the senior management structure.
“Fiscal 2012 has got off to a challenging start. The slowdown we saw in the first quarter is continuing into the second quarter, and delays in new product introductions into the very late part of August are leading to a lower than expected outlook in the second quarter,” said Jim Balsillie, co-chief executive.
As a result, RIM said it expects earnings in the current quarter of between 75 cents and $1.05, sharply below the already pessimistic expectation of $1.40. It also cut its earnings outlook for the full year to $4.25-$6 a share, from $7.50 previously.
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