Bad news for RIM drops stock 14%: a poor earnings report and a delay in the 4G BlackBerry PlayBook

Bad news for RIM drops stock 14%: a poor earnings report and a delay in the 4G BlackBerry PlayBook
After the stock market closed on Thursday, RIM reported earnings for the first quarter that fell short of internal expectations not to mention the estimates of Wall Street analysts. Blaming the economic recession and product delays, the Canadian tech company reported earnings of $695 million for Q1, down from last year's $769 million. The company lowered its expectations for the current quarter to earnings of .75 cents to $1.05 a share while Wall Street was looking for $1.36 a share for Q2. For the full year, RIM now expects to earn $5.25 to $6.00 a share, off from a previous estimate made in April of $7.50 a share. Investors have been dropping the stock like a slippery smartphone with the shares off 14% since the report was released.

RIM Co-Ceo Jim Balsillie said, "The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter." The company also said that it would streamline costs by laying off some workers. And the news went from bad to worse when RIM announced that the 4G version of the BlackBerry PlayBook, expected to launch this summer with an LTE version for Verizon, a WiMax model for Sprint and an HSPA+ variant for AT&T-will be delayed until this fall.

If there was one bright spot for the company, it was the 500,000 units of the Wi-Fi version of the BlackBerry PlayBook that was sold in the first quarter, beating some estimates. 200,000 units went to distribution channels while 250,000 to 300,000 were sold to end users. RIM did not reveal how many of the tablets in the distribution channels were sold through to end users. The number compares with the 250,000 units of the Motorola XOOM tablet shipped in the first two months of life, and more than 1 million units shipped in less than two months for the Samsung Galaxy Tab.

source: YahooFinance, BGR (1), (2), (3)

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1. nb2six

Posts: 298; Member since: Apr 27, 2011

Adios RIM..They delay the release of the new bold and torch till late august, with layoffs starting in the factories. I'd say it's a tough time to still stay loyal to a once dominate company in the mobile industry.

2. hepresearch unregistered

hmmm... not too surprised. Nokia = original suicide jumper, RIM = first lemming, HP = second lemming... Microsoft = vulture feasting at the bottom of the cliff.

3. TreyTreyTaylor

Posts: 728; Member since: Dec 21, 2010

Aw man, first palm now blackberry. Actually palm was never as big as RIM in the first place but anyways, this should be a big lesson to them. RIM's problem is thinking that their "devoted" business users" will never feel the need to switch operating system's. Wake up and get cracking with phones more innovative. Motorola proved that going all in on something different can have amazing results (og droid single-handedly revived the first company to make a cell phone). Even though I personally would never leave android due to being spoiled with features, I would really hate to see Blackberry go.

4. cornerofthemoon

Posts: 620; Member since: Apr 20, 2010

RIM's fumble may be a great opportunity for HP and webOS to win the bronze medal. Nokia may be too late to help Microsoft win third place.


Posts: 701; Member since: Jun 07, 2011

Sorry RIM you cannot compete with 2008 technology any longer

6. biglebronski

Posts: 22; Member since: Mar 18, 2011

RIM does need to get into gear quickly to catch back up. Too bad their 2011 devices won't be ready until almost 2012. Some of them look like they could actually be competitive right now. That being said, if that $695M is actual earnings, and not revenue, RIM should still have plenty of time to get back in the game. There are plenty of BB loyalists still out there to float them along for a little while....By the way, a good bit of RIM's losses could be due to people waiting anxiously for those new devices. Problem is, the longer they stall, the more flashy new devices become available in the meantime.

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