Research in Motion (Rim) reported subscriber and shipment figures that disappointed investors and rekindled fears that the BlackBerry maker is losing market share to Apple and other rivals.
Shares of Rim tumbled more than 5 per cent in after-hour trade even as the company said its quarterly profit rose almost 20 per cent. The profit topped expectations, but failed to calm edgy investors, who are concerned by Rim's waning fortunes in its core North American market.
Adding to the concern, a 24 per cent jump in revenue fell short of the Wall Street consensus view, due to weaker-than-expected unit shipments and fewer-than-expected subscriber additions. Gross profit margins also receded, suggesting that low-priced models were a growing part of the sales mix.
Overall, the results did little to dispel the perception that competition from the likes of Apple's iPhone and Motorola's Droid is stiffening.
Charter Equity analyst Ed Snyder said investors were hoping to see more phones sold, with stronger profit margins. "It's a mixed report. It's a little light on revenue and light on units for this quarter," he said. "It's not the strong report everybody had been hoping for. The market is in a bad mood so its a tough time to be giving a mixed bag."
Rim's results came in the same day as the global launch of the iPhone 4, the latest version of Apple's popular touchscreen smartphone. Apple sold 600,000 of the new devices in pre-orders in a single day last week, and analysts expect over 1 million sold in stores on the first day.
Shares of Rim settled $2.83 lower at $55.75 in post-market trade in the United States, even as RIM's board authorised a share repurchase program to buy back up to about 31 million common shares.
Rim sought to allay investor fears on its conference call with analysts, promising the launch of two higher-end devices in the current quarter that will likely help boost the average selling price in the quarter.
BlackBerry aficionados and RIM investors are hoping the Waterloo, Ontario-based company will unveil the highly anticipated BlackBerry 9800 in the quarter. The touchscreen device is said to have a full slide-out keyboard, along with a new operating system and revamped web browser.
Analysts believe the new device, expected to be dubbed the BlackBerry Torch, could revive RIM's sagging fortunes in North America and help it regain some of its lost cache.
"Forecasting the second quarter is challenging given that we are planning two significant product introductions that will likely bridge the end of Q2 and into Q3," said Rim co-chief executive Jim Balsillie.
The company posted fiscal first-quarter earnings of $769 million, or $1.38 a share, in the three months ending May 29th, up from $643 million, or $1.12, in the same period last year. Quarterly revenue rose 24 per cent to $4.24 billion.
Analysts on average had forecast earnings of $1.34 a share, on revenues of $4.35 billion.
Rim said shipments topped 11 million and it added 4.9 million new subscribers in the quarter. Both umbers came in at the low end of the company's forecast range, but were short of what analysts had expected.
The company expects to ship 11.6 million to 12.1 million devices in the current quarter, while bringing on board between 4.9 million and 5.2 million new subscribers in the period.
The company also forecast fiscal second-quarter earnings of $1.33 to $1.40 a share, on revenue of between $4.4 billion and $4.6 billion. Analysts were looking for earnings of $1.31 a share, on revenue of $4.50 billion.
Reuters