RIM reports steep drop in quarterly profit, shares sink 20%

By on

Research In Motion is taking a beating in the stock market after reporting another disappointing quarter. The Canadian firm saw profit before tax fall by half from $904 million, on revenue of $4.9 billion the previous quarter, to $414 million on revenue of $4.1 billion in the three months ending 27 August 2011. The drop is attributed mostly to an aging lineup of BlackBerry smartphones, which was only refreshed very late in the quarter, and slow sales of its PlayBook tablet device.

It was also the first time the company saw a year-over-year decline in BlackBerry shipments. RIM shipped 10.6 million smartphones and 200,000 PlayBook tablet computers during the quarter, sharply below analysts' average estimate of 11 to 12 million BlackBerry phones and between 400,000 and 600,000 PlayBooks. By comparison, Apple sold 20.34 million iPhones and 9.25 million iPads in its most recent quarter.

The company said it expected results to pick up through the rest of the year as upgraded, touchscreen versions of its Bold, Torch and Curve smartphones start selling in volume across the world along a Torch-branded touchscreen-only device. Their QNX-based smartphones are not likely to arrive until sometime next year, however.

Revenue for the next quarter ending 26 November 2011 is estimated to be in the range of $5.3-$5.6 billion, with a gross margin of 37%, and Blackberry smartphone shipments between 13.5 and 14.5 million. Despite these promises RIM's shares on NASDAQ have dropped more than 20% since the results were posted (currently at $24.36).

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.