RIM Shares Fall On Revenue Projections
Shares in Waterloo, Ont.-based BlackBerry maker Research in Motion fell $1.02, or 6.7 per cent, to $14.06 US in extended hours trading after it projected disappointing profits in its current quarter.
RIM reported after markets closed Thursday that it earned $265 million US, or 51 cents per share, in its third quarter, down more than 70 per cent from the same period a year earlier.
RIM reports in U.S. dollars.
A year ago, it made $911 million, or $1.74 per share.
Revenue totalled $5.17 billion, down from $5.5 billion and in line with analysts’ expectations of $5.26 billion.
Investors were disappointed as the company said it expected earnings per share for the fourth quarter to be in the range of 80 to 95 cents a share
Analysts had projected profit of $1.08 a share, according to Bloomberg data.
RIM estimates revenue in the current quarter will come in at between $4.6 to $4.9 billion.
The firm said BlackBerry smartphone shipments are expected to be between 11 million and 12 million, below the 13 million analysts had expected.
Co-CEO Jim Balsille told analysts in a conference call that the firm is evaluating a broad range of options on changing RIM's organizational structure and that he and fellow CEO Mike Lazaridis have asked for their respective salaries to be reduced to one dollar.
Both men have come under fire from investors and analysts calling for them to relinquish their joint chairmanship of the company's board or consider splitting up the company and selling off components.
RIM, which has faced intense competition from Apple's iPhone and devices using Google's Android technology, had earlier warned investors that it will book a $485-million US charge before tax on the cost of discounting the price of PlayBooks by more than half to help boost sales.
Other than the PlayBook tablet, RIM has few new products in the marketplace. It launched new versions of the BlackBerry Bold and Torch in late summer but won't have the new generation of BlackBerrys with a new, updated operating system out until early next year.
RIM cut about 2,000 jobs, or 11 per cent of its workforce, earlier this year to trim costs.
The company's shares had jumped five per cent or more on nine trading days since July amid speculation about a possible takeover bid.
But the stock has plunged nearly 80 per cent since February.
RIM is now trading below its estimated book value, or the accounting value of its assets if the firm was liquidated.
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