RIM cuts profit forecast on weak BlackBerry sales

By Laurie Segall, staff reporter


NEW YORK (CNNMoney) -- Research in Motion on Thursday slashed its earnings forecast for the current quarter, citing sluggish BlackBerry sales.

The company now expects that its per-share earnings will be in the range of $1.30 to $1.37 -- lower than the $1.47 to $1.55 range it forecast last month. It also reduced its revenue guidance, saying it thinks it will come in "slightly below" the $5.2 billion it previously offered as a low-end estimate.

RIM said earlier that it expects to sell 13.5 million to 14.5 million BlackBerry smartphones in its ongoing quarter, which will end May 31. It now expects to be at the lower end of that range, and it warned that customers who are buying BlackBerrys are opting for the cheaper models.

That's an ominous sign for a device maker that's fighting hard to stay on top in a market it once dominated.

On a conference call with analysts, RIM co-CEO Jim Balsillie used the word "transition" at least a dozen times, citing the company's move to position itself as a player in the higher-end smartphone market and in the tablet arena.

"Yes there's a transition right now, yes it's affecting near-term volume, but we don't think it changes our long-term strategy," he said. "This is a transition between the existing architecture and the new architecture."

RIM's new tablet, the PlayBook, debuted earlier this month to lukewarm reviews.

Balsillie passionately defended the PlayBook on Thursday's call, launching into a mini-rant about its underappreciated potential.

"Nobody doubts the absolute performance of that machine and what can be done," he said."We have actually put this company straight in the middle of the tablet mobile computing space."

RIM said that it expects PlayBook sales this quarter to live up to its earlier expectations. It added that Japan's earthquake has not caused any significant supply disruptions.

Shares of RIM were briefly halted after hours. When trading resumed, RIMM (RIMM) shares dropped 11%.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,817.90 7.84 0.04%
Nasdaq 4,754.89 41.92 0.89%
S&P 500 2,069.41 5.91 0.29%
Treasuries 2.31 -0.00 -0.22%
Data as of 9:07pm ET
Company Price Change % Change
Bank of America Corp... 17.18 0.06 0.35%
Apple Inc 118.62 2.16 1.85%
AT&T Inc 34.70 -0.58 -1.64%
Microsoft Corp 47.59 -0.39 -0.81%
Intel Corp 36.25 0.66 1.85%
Data as of 4:01pm ET

Sections

Eight of the accidents involved Takata airbags, which can explode and hit passengers with shrapnel. More

Russia's finance minister warned Monday that his country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations. More

Drone regulation is coming to the United States, and the rules might be too severe for everyday businesses. More

Obama doesn't have the authority to create a startup visa, but part of his reform announcement could include a workaround for entrepreneurs: 'parole status.' More

Ever since the Ebola epidemic erupted in her hometown of Foya, Liberia, Deboriah Foko has been working with Doctors Without Borders to inform others about this deadly virus. Here are journal entries from a day in her life. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.