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 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 1:05pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17

Sections

Spencer has been a supporting member of the "Good Morning America" cast for the past three years. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.