RIM cuts profit forecast on weak BlackBerry sales

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%.