BlackBerry Maker Profit Falls, Cuts Jobs

The BlackBerry's (RIMM) inability to compete with the iPhone and smartphones running Google's Android system shone through Thursday as the maker of the BlackBerry, Research In Motion Ltd., said its earnings and revenue fell.

The Canadian company said it's been hurt by product delays. Its stock fell 14 percent in extended trading after the release of results for the latest quarter.

RIM said it is cutting an unspecified number of jobs to reduce costs. It gave an outlook well below Wall Street's expectations for the current quarter and the full year.

"The existing portfolio of BlackBerry products has been in market for close to a year, and delivering new products has proven more challenging than anticipated," RIM Co-CEO Jim Balsillie said on a conference call with analysts.

Co-CEO Mike Lazaridis made a rare appearance on the call as the two defended the business and their role as co-CEOs.

Lazaridis said RIM was already far along in developing its next-generation BlackBerrys when it realized that U.S. customres wanted higher performance, requiring the company to upgrade the chips used. That posed an engineering challenge and delayed products, he said.

For the three months that ended May 28, RIM earned $695 million, or $1.33 per share. That's down from $769 million, or $1.38 per share, a year ago.

Revenue for the fiscal first quarter rose 16 percent to $4.9 billion from $4.2 billion.

Analysts polled by FactSet expected earnings of $1.32 per share on revenue of $5.1 billion.

RIM is facing fierce competition from Apple Inc.'s iPhone and smartphones that run Google Inc.'s Android operating system.

Aurion Capital Management analyst Greg Taylor said the results reflect the fact that RIM doesn't appear to have any new smartphones coming out soon.

"Everyone wants to have the newest and greatest device, and they don't have anything to sell right now," Taylor said. "Their guidance shows they're basically not expecting new smartphones this quarter."

For the current quarter, RIM forecast earnings of 75 cents to $1.05 per share, excluding items. Analysts are looking for far higher earnings of $1.36 per share. The company expects revenue of $4.2 billion to $4.8 billion, below analysts' average expectation of nearly $5.3 billion.

RIM lowered its full-year earnings outlook sharply. It now expects earnings of $5.25 to $6 per share for fiscal 2012. In April, it had forecast $7.50 per share.

RIM said earlier Thursday that Don Morrison, its chief operating officer, is going on medical leave.

Before the earnings RIM's stock was already off 50 percent from its 52-week high. In April, the company slashed earnings and sales forecasts as it faces increased competition. In extended trading after the results came out, RIM's stock fell $4.92, or 14 percent, to $30.41.

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call me verizon????????????????????????????????

June 23 2011 at 4:45 PM Report abuse rate up rate down Reply

I knew when the iphone was first released that it was trouble for Blackberry.

June 17 2011 at 10:47 PM Report abuse rate up rate down Reply

This is no surprise since this administration went about thing all the wrong way. Then add the increased price of fuels and the climbing unemployment numbers all has a negative effect on consumer confidence. Once people stopping adding capital to the economy job loses will increase. This administration had the chance to turn this all around but chose to do nothing. Now they are trying to block Boeing from opening a new jet liner plant in South Carolina simply because it is not a union friendly state but a right to work state. I thought this president was going to create jobs not kill them or try and tell companies what they can and can not do.

June 17 2011 at 2:02 PM Report abuse rate up rate down Reply