Is Research In Motion’s flickering flame fading even more?
A dismal earnings report Thursday afternoon shows the Canada-based smartphone giant’s net income was down 59 percent in its fiscal second quarter – ending Aug. 27 – when compared to numbers just one year ago. Revenue was off 10 percent. The company failed to meet Wall Street projections, even though most weren’t that optimistic. Specifically, shipments of the BlackBerry PlayBook – the company’s signature tablet PC – were less than half of what was projected. And instead of the nearly 12 million smartphone shipments that analysts were expecting, RIM came through with just 10.6 million.
That didn’t sit well with investors. RIM stock plunged more than 18 percent for the day, factoring in after-hours trading. Just three summers ago, shares were trading at almost $145; it’s now $24.
You’d think that would leave RIM execs crying over spilled milk, but they’re painting a rosier picture. The updates to the Bold and Torch smartphones based on the new BlackBerry 7 operating system came out just days before the quarter ended, leading company leaders to believe the next three months could lead to much different results.
“We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products.," said Jim Balsillie, Co-CEO at Research In Motion. “Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models."
In addition to sales of BlackBerry 7 devices, RIM is turning its focus toward its much-hyped, next-generation, QNX-based mobile platform set to debut next year.
Despite RIM’s optimism, these results will only increase the speculation that the company should be a target for acquisition.
