- •Contact us
- •About us
- •Advertise with the FT
- •Terms & conditions
© The Financial Times Ltd 2013 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: September 16, 2011 12:14 am
Research in Motion, the Canadian-based maker of BlackBerry smartphones and PlayBook tablets, has suffered a further setback in its attempts to lure customers away from rivals Apple and Google after again missing its earnings targets.
Shares in the company plunged more than 21 per cent in morning trading on Friday following poor second-quarter sales of its older handsets and warnings of lower margins in the current quarter.
RIM sold 200,000 PlayBook tablets – fewer than half of the 550,000 units analysts had forecast in the second quarter – while it shipped 10.6m BlackBerry smartphones – 1m units less than expected.
“Overall, unit shipments in the quarter were slightly below our forecast due to lower than expected sales for older models,” said Jim Balsillie, Research in Motion’s co-chief executive. RIM is pinning its hopes on sales of the company’s new handsets based on its latest BlackBerry 7 operating system, which are forecast for a big jump this quarter.
Mr Balsillie said there had been a very positive reception for the new handsets – designed to help the company compete more effectively with Apple’s iPhone and Google’s Android-based smartphones and stem the decline of RIM’s US market share.
RIM, which is expected to launch a new family of smartphones based on a completely different operating system called QNX early next year, said it expects to sell 13.5m-14.5m BlackBerrys in the current third quarter but warned margins would fall to 37 per cent because of lower service revenues and costs related to the PlayBook.
RIM has been struggling to keep pace with its rivals over the past six months and has seen its share price plummet by more than 50 per cent because of delayed product launches and a succession of lower earnings guidance. Against that backdrop, analysts said the missed second-quarter targets overshadowed the more optimistic outlook for the current quarter and could further tax the credibility of RIM’s management.
Mike Abramsky, an analyst at Royal Bank of Canada, said RIM’s “credibility sinks further as it’s apparent to us that visibility remains very low and investor risks remain elevated”.
For the fiscal second quarter, RIM reported revenue of $4.2bn, down 15 per cent from $4.9bn in the previous quarter and down 10 per cent from $4.6bn in the same quarter last year. Net income was $329m or $0.63 per share and adjusted net income was $419m or $0.80 per share.
On a call with analysts, RIM’s senior executives insisted they were confident about the outlook due to the strong reception for the BlackBerry 7 handsets. They pointed to plans to update the PlayBook with new software including features missing from the initial launch.
Copyright The Financial Times Limited 2013. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.