The makers of BlackBerry reported last quarter’s earnings were $1.33 per share on revenue of $4.91 billion. The report fell beneath investors’ expectations of $1.32 on $5.14 billion in revenue.
For their next quarter, RIM’s guidance is $4.2 per share on $4.8 billion, which is also below the expected $5.46 billion. Although investors were bracing themselves for bad news, the predictions for next quarter’s earnings are much worse than what they had prepared for.
In late trading, RIM’s stocks fell by 16%, causing them to halt trading. The drop was caused by RIM’s report that profits would estimate $0.75 to $1.05 per share. Since February, the cell phone makers’ stocks have already gone down by 50%. After trading resumed, stocks dropped as low as $29.60, finally ending at $35.33. RIM has lost 39% this year.
Analysts say the plunge is due to RIM’s inability to produce any new models since last August. While businesses have depended on BlackBerries in the past due to their secure access to email and data, it seems like corporations are ditching their berries for apples and droids.
Since January, the percentage of BlackBerry users dropped drastically from 30.4% to 10.3%, while Apple and Android continued to gain more users.
As great as BlackBerries are, they just haven’t been able to keep up with iPhones and Androids when it comes to running third-party applications. RIM reportedly shipped 13.2 million BlackBerries last year, falling short of analysts’ predictions of 13.6 million. And though RIM said that it shipped 500,000 of its new PlayBook, there is no word on how many were actually sold. The PlayBook doesn’t come close to its rival iPad, which sold 4.69 million in the last quarter.
Although RIM promised to streamline operations and cut jobs, investors are pointing fingers at the two co-CEOs and three operating chiefs. But co-CEO Jim Balsillie reassures investors that “taking the company to the next level of success is a job neither” he nor co-CEO Mike Lazaridis can do alone. RIM is planning to cut an unnamed amount of jobs, and benefits from the cuts should appear in the next quarter.
RIM reports to have a full-year profit of $5.25 to $6.00 a share, down from a previous forecast of $7.50.
It was a rocky quarter for the once-renowned cell phone maker. They’re doing what they can to get back into the game, but will they make it to the next round?