Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 16,204.97 -211.61 -1.29%
Nasdaq 4,363.14 -146.41 -3.25%
S&P 500 1,880.05 -35.40 -1.85%
Treasuries 1.85 -0.02 -0.86%
Data as of 11:04am ET
Company Price Change % Change
Bank of America Corp... 12.95 -0.30 -2.26%
Facebook Inc 104.07 -6.42 -5.81%
Freeport-McMoRan Inc... 5.68 -0.04 -0.70%
Microsoft Corp 50.16 -1.84 -3.54%
General Electric Co 28.54 -0.64 -2.19%
Data as of Feb 5

Sections

Anheuser-Busch has been the exclusive beer advertiser featured during the Super Bowl since 1975, and it's spent more on Super Bowl advertising than any other company for the last five years in a row. More

The economy is better than it was, but not even President Obama is ready to declare it's booming. More

Laurie Segall sits down with Foursquare's new CEO Jeff Glueck to discuss the company's latest round of funding at a lower valuation, and their hybrid consumer/enterprise business model. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

Portland, Oregon, is often described as the last affordable cool city on the West Coast. But as more people move to the city, it's becoming increasingly unaffordable. More