With Research In Motion Ltd. in stiff competition with Apple Inc. and Google Inc., profit forecasts for this quarter was lowered based on slower-than- expected demand for BlackBerry smartphones. The stock plunged.
Profit slightly increased this quarter from $1.30 to $1.37 a share, Waterloo, Ontario-based RIM said today in a statement. Last month, RIM’s forecast profit was estimated at $1.47 to $1.55 a share. Sales in the quarter ending May 28 will be slightly below” the $5.2 billion to $5.6 billion the company had forecast.
RIM said BlackBerry shipments will be at the lower end of the range of 13.5 million to 14.5 million it projected last month, and the mix of devices it sells will shift toward cheaper models. The forecast shows that higher-end BlackBerrys like the Torch, designed to compete with Apple’s iPhone and devices built on Google’s Android platform, are missing estimates, said Michael Walkley, an analyst at Canaccord Genuity Ltd.
Higher-end phones have not sold so well,” said Walkley, who has a hold” rating on the stock. The investment community was already skeptical about the full-year guidance of $7.50 and this gives them reason to be more skeptical.”
Analysts predicted earnings of $1.50 a share on sales of $5.44 billion for this quarter, the average estimates compiled by Bloomberg.
RIM fell $5.20, or 9.2 percent, to $51.39 in late trading, after closing at $56.59 on the Nasdaq Stock Market. It has lost 2.7 percent this year as of today’s close.