RIM results lag estimates, shares drop
By Susan Taylor
OTTAWA (Reuters) - Research in Motion said quarterly profit and sales rose, but the results lagged expectations and the stock tumbled on rekindled fears that the dominance of its BlackBerry smartphone is waning.
RIM, the object of increasingly higher expectations for its fiscal fourth quarter in recent days, said it shipped 10.5 million phones in quarter, well shy of a consensus estimate of about 11 million devices.
Profit and phone shipment forecasts had ratcheted up with RIM moving aggressively into the mainstream consumer market and expanding international sales to counter growing competition in its bread-and-butter sales to corporate executives.
The disappointing shipments may point to stronger demand for rival Apple's iPhone and that Motorola's Droid may have started to gain traction with consumers, Charter Equity Research analyst Ed Snyder said.
"They had this business to themselves for years. Now everybody's joined the party. The U.S. is probably tough for them now," said Snyder, referring to increased competition in the United States.
The Droid has been heavily promoted by Verizon Wireless, which is also expected soon to start selling the iPhone, which could further bruise RIM in the U.S. market.
RIM told analysts on a conference call that revenue in the quarter was hit by a customer's changed inventory policy and bigger sales of cheaper phones. But its chief executive repeatedly pointed to big plans for the year ahead.
"We guided a really strong Q1 based on just what is going on now," CEO Jim Balsillie said referring to product launch plans. "If you saw the roadmap you'd be blown away." Continued...