RIM delays BlackBerry 10 until late 2012

@CNNMoneyTech December 15, 2011: 5:43 PM ET
chart_ws_stock_researchinmotionltd_201112151746.top.png

NEW YORK (CNNMoney) -- As expected, BlackBerry maker Research In Motion said Thursday that it had a miserable past three months, reporting a quarterly profit that got squeezed by slumping sales and service outages.

What wasn't expected was such a miserable outlook for the current quarter.

The company said it expects to earn between 80 cents and 95 cents a share on revenue of between $4.6 billion and $4.9 billion. That's way, way below analysts' profit forecasts of $1.16 per share on sales of $5.1 billion.

RIM also said it expects to ship just 11 million to 12 million BlackBerry phones, a truly disappointing forecast that is just barely higher than the company's smartphone shipments from a year earlier.

Making matters worse, the company also said that its future platform, BlackBerry OS 10 -- the cornerstone of RIM's turnaround plans -- will be delayed until late 2012. The company says it is waiting on the development of a special chipset for its new devices.

Shares fell by 8% after hours, even though RIM (RIMM) had already warned investors two weeks ago that its financial results would fall short of the company's earlier expectations.

The company blamed its bad third quarter on lackluster demand for its new PlayBook tablet, on consumers opting for cheaper BlackBerry smartphones, and on its three-day service outage.

"The last few quarters have been some of the most trying in the history of this company," said Jim Balsillie, RIM's co-CEO, on a conference call with analysts. "We understand shareholders may feel like we let them down. [Co-CEO] Mike [Lazaridis] and I, as two of RIM's largest shareholders, understand that sentiment."

Balsillie said that he and Lazaridis have decided to take a salary of just $1 a year, effective immediately. Last year, both made $1.2 million Canadian, which was around $1.15 million U.S. at the time. They also each took home a $1.2 million cash performance bonus.

Despite the terrible results, RIM's co-CEOs remained upbeat in their discussion with analysts. BlackBerry's user base grew to 75 million, up 35% from a year ago, they pointed out.

They also said that the company is "more determined than ever" to overcome its execution challenges. They preached continued patience and said that RIM's transition to new, improved BlackBerry OS software will slowly gain traction -- once it finally releases.

"We ask for your patience and confidence," said Lazaridis on the call.

By the numbers

The Waterloo, Ontario-based company said net income for the third quarter, which ended last month, fell to $265 million. That's down 19% from a year earlier.

RIM's results included a one-time charge of $485 million write-down due to underperforming PlayBook sales and a $54 million charge for the outage. Without the charges, RIM said it earned $1.27 per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, had forecast earnings of $1.19 cents per share.

RIM's sales in the quarter rose 24% to $5.2 billion, missing analysts' reduced forecasts of $5.3 billion.

RIM said that it shipped 14.1 million BlackBerry phones last quarter. While RIM's third-quarter smartphones shipments were in line with the company's forecast of between 13.5 million and 14.5 million, RIM said phones were sitting on store shelves, as it sold fewer devices to end-users than it had expected. To top of page

rightBranding 3

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.