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TORONTO (Reuters) - Research In Motion shares fell as much as 10 percent on Monday after one brokerage said retail sales trends for its BlackBerry smartphones in North America and Western Europe were weaker than hoped and another cut its earnings forecasts.
In a note on Monday, Pacific Crest Securities analyst James Faucette said so-called "sell-through" trends throughout the middle of October had been "slightly disappointing".
He also said risks to November-quarter results were building as the company becomes more reliant on "aggressive and successful" launches of its BlackBerry Storm and BlackBerry Bold models in the United States.
"In order to hit the company guidance, these new products have to be more successful," Faucette said.
As well, early sales of the BlackBerry Pearl Flip have been tepid at best and sales execution problems in Canada and Britain are plaguing Curve and Bold sales, he said.
Also on Monday, brokerage Morgan Keegan & Co Inc downgraded its revenue and earnings outlook for RIM, citing the "substantial worldwide damage" to the broader economic outlook since September.
In a note, analyst Tavis McCourt forecast RIM's revenue in 2009 of $11.08 billion, revised down from $11.55 billion, and $17.31 billion in 2010, down from $19.58 billion.
For earnings, McCourt sees $3.47 a share in 2009, revised down from $3.75, and $4.49 in 2010, down from $5.84.
RIM shares closed down 7.6 percent at C$64.88 on the Toronto Stock Exchange on Monday, after earlier dipping as low as C$63.25. On Nasdaq, they closed down 8.6 percent at $53.91.
RIM shares, which were worth more than $145 on Nasdaq about four months ago, have been dragged down by the U.S. financial crisis and by margin pressures due to expenses related to the launch of new smartphones.
"People are ratcheting back their expectations for earnings," said Peter Misek, an analyst at Canaccord Adams. "It's a pretty direct relationship when you see consensus estimates come down."
On October 8, Misek cut his outlook on RIM, citing an array of possible pressures, including a deterioration in the global economy, tougher competition and delays in penetrating new geographic markets.
However, he upgraded RIM's stock rating to "buy" from "hold."
"We said to ourselves the stock in a worst-case scenario is worth $50," said Misek. "In a more moderate scenario, it is worth $72.75 to $75. That prompted us to upgrade."
Paradigm analyst Barry Richards said it was too soon to make any assessment of what will happen to RIM's results.
"With the Bold, the Flip and the Storm all set to ramp in the back half of October and through November it is too early to make any assessment of the potential for Q3 or Q4 results," Richards wrote in a midday note.
Reporting by Jennifer Kwan; editing by Rob Wilson