Research In Motion stock punished for weak sales

Shares of Research In Motion (RIM) plunged almost a fifth on Wall Street on Friday after reporting sales and profits that fell short of expectations. The company’s signature BlackBerry mobile phones have been selling like hotcakes in many developing markets, largely thanks to the budget-friendly low, fixed data price for messaging and browsing from the phone, but are struggling in the Americas and Europe.

RIM shares lost 19 percent on the Nasdaq stock exchange to close at $23.93. It had a market capitalization of more than $30 billion at the start of the year, but the latest declines have reduced its value to around $12 billion. At the same time as this recent bad news, the company also suffered a major outage of its BlackBerry Messenger (BBM) service in Canada and Latin America.

RIM said Thursday that net profit fell to $329 million, or 63 cents per share, in its fiscal second quarter from $797 million, or $1.46 per share, in the same quarter a year ago. Revenue declined to $4.2 billion in the quarter which ended on August 27 from $4.6 billion a year ago.

RIM, which is facing stiff competition from Apple’s iPhone and handsets running Google’s Android software, said it shipped 10.6 million BlackBerry smartphones during the quarter and 200,000 PlayBooks, RIM’s rival to the iPad.

Analysts had expected BlackBerry shipments of 11.9 million units and 700,000 PlayBooks.

RIM said it expected BlackBerry shipments to grow between 27 percent and 33 percent in the third fiscal quarter over the second quarter, to between 13.5 million units and 14.5 million units. It did not provide a forecast for PlayBook shipments.

– AFP