December 4, 2020

BlackBerry Maker Cuts Its Forecast

That defense is not looking so solid. RIM, the maker of BlackBerry phones, lowered its profit forecast for the current quarter by 11 percent on Thursday, sending its stock down more than 10 percent in after-hours trading.

The announcement followed a less-than-positive reception for the company’s first tablet, the BlackBerry PlayBook, which was released this month and was meant to be an answer to Apple’s popular iPad. Critics found that while the device had merits, it was shipped without several important features and was troubled by minor software problems, suggesting that it was a rushed job.

During a conference call with analysts, Jim Balsillie, the co-chief executive of RIM, said PlayBook sales were within the company’s expectations, but he did not provide any specific figures.

Mr. Balsillie attributed the earnings downgrade to a problem that was the opposite of the PlayBook’s: delays in introducing new BlackBerry phones. While the company said sales of lower-margin, less costly BlackBerry phones remained strong, sales and shipments of its more profitable flagship models were swiftly declining in the United States and Latin America.

Mr. Balsillie said that next week the company would unveil a variety of new phones at its annual trade show that would allow it regain market share against the iPhone and phones running Google’s Android software in the high end of the market.

“The entry-level products do a fine job for us,” Mr. Balsillie said. “But we also need these higher-end, newer products and we need them in the market.”

RIM, which is based in Waterloo, Ontario, said it expected to post diluted earnings of $1.30 to $1.37 a share when the quarter comes to a close at the end of May. Late in March, it forecast profits of $1.47 to $1.55 a share.

Shaw Wu, an analyst with Sterne Agee in San Francisco, said RIM’s sales in the United States had fallen for five consecutive quarters. Growth in overseas markets and in Canada, he said, had been offsetting that trend.

“Now we’re concerned that the international growth will start to slow,” Mr. Wu said.

At one point Mr. Balsillie gently mocked critics who found the PlayBook to not be “all polished” and argued that no one had disputed the potential capabilities of the device.

The PlayBook introduced a new operating system for RIM that allowed it to make devices with features similar to those found on the iPhone and iPad while also supporting Adobe Flash, software which is widely used for video on the Web but is not supported by Apple’s mobile products.

RIM plans to use that operating system in its new phones, something which Mr. Balsillie suggested was a factor in the delays.

Mr. Wu said that while he expected RIM to again offer competitive products, re-establishing the company’s former prominence in the smartphone market would be difficult and take time.

“When you do a transition like this, it creates hiccups,” he said.

Shares of RIM rose 1.8 percent to close at $56.59 in regular trading. In after-hours trading, it dropped as low as $50.21.

Article source: http://feeds.nytimes.com/click.phdo?i=f8228078cff5059b123011f7c1857c76

Speak Your Mind