Research In Motion's quarterly profit dropped and revenue missed its own limp forecast, forcing the BlackBerry maker to slash its outlook and sending its shares down 15 per cent.
Facing intense pressure from Apple and Google in the smartphone market, RIM also warned that its latest models would not hit US stores until well into the valuable back-to-school shopping season.
The delay will likely add to the disappointment felt by investors after RIM's botched launch of its PlayBook tablet computer this spring.
"The company is going into the abyss of a transition, and even if they get a new model, it's a new model on the old platform," said BGC Partners analyst Colin Gillis, one of many who has criticized RIM's product development pipeline.
RIM has promised smartphones next year running on its new QNX platform, now featured in the PlayBook, but only after it releases a series of devices with an upgraded version of the current operating system. But even those upgrades to its Bold business workhorse, new Torch and Storm models won't go on sale until late August, RIM said.
That delay pushed RIM to forecast shipments of between 11 million and 12.5 million smartphones in the current quarter, sharply lower than the more than 14 million eyed by analysts.
RIM shipped 13.2 million BlackBerrys in the three months to May 28th, missing its own estimate.
It shipped 500,000 PlayBook tablets in the six weeks after its April launch, exceeding the average analyst forecast of 366,000. Even so, the number represents a small fraction of Apple's iPad sales.
RIM, once a byword for corporate mobile communications, has lost allure as Apple's iPhone and later Google's Android operating system changed the rules of the game.
Up against that competition, analysts had thought it was only a matter of time before RIM abandoned a $7.50 a share earnings outlook for the year to late March 2012. Yesterday, it did just that, recalibrating expectations to between $5.25 and $6 a share.
The company said it plans to cut jobs and focus its resources on accelerating its product pipeline. The company did not disclose the number of job cuts, but indicated that it intends to begin this reorganisation immediately.
To help boost its sagging share price, RIM intends to buy back up to 5 per cent of its outstanding shares and it said the board did not expect that the spending would have a negative impact its growth plan. Its full year forecast for earnings per share did not calculate any impact of the share buyback.
Shares of RIM - which reported its results after the close - fell to nearly a five-year low during the regular session after the company said a senior executive had taken medical leave.
RIM shares fell more than 15 per cent further to $29.84 in trade after the closing bell in the United States.
Reuters
