Research In Motion, the beleaguered handset maker with a BlackBerry subscriber base of roughly 75 million customers, on Thursday revealed that its profit plunged in its third fiscal quarter.
Year over year, quarterly net income fell from $911 million, or $1.74 per share diluted, to $265 million, or $0.51 per share diluted.
Revenues totaled $5.2 billion, reflecting a 6 percent decline from the year-ago period.
In the most recent quarter ending Nov. 26, the Canada-based company shipped 14.1 million BlackBerry smartphones and 150,000 PlayBook tablet computers.
For the fourth quarter of fiscal 2012, RIM forecasts revenues of $4.6-$4.9 billion and earnings per share of $0.80-$0.95. The company also anticipates shipping between 11 and 12 million BlackBerry smartphones.
The last few months haven't been kind to RIM. The company incurred a pre-tax, predominantly non-cash charge of $485 million due to meager sales of its PlayBook tablet and suffered a days-long network outage that interrupted BlackBerry services for millions of customers around the world. RIM also faced a number of other embarrassing incidents and continued criticism from Wall Street analysts and other naysayers who are increasingly questioning the competence of the senior management.
Shareholders have gotten murdered. The stock price has fallen 74 percent this year, and the company has lost three quarters of its market value, according to Bloomberg.
Still, the story at RIM is not entirely grim. Although it has been losing market share to Apple's iPhone and smartphones that feature Google's Android operating system, the BlackBerry maker continues to grow its customer base. And Yankee Group, the Boston-based research and consultancy firm, recently predicted that RIM would grow its share in the consumer market next year and remain one of the top three smartphone suppliers.
"Despite the challenges faced in the third quarter, the BlackBerry subscriber base grew to almost 75 million customers around the world," RIM co-CEOs Jim Balsillie and Jim Lazaridis said. "RIM launched a range of new BlackBerry 7 based smartphones globally and introduced holiday promotions that helped drive growth in the installed base of BlackBerry PlayBook user."
Earlier this year, RIM was hoping that its PlayBook tablet computer would help revive its world standing as an innovator. By and large, the device has been a disappointment. In the third quarter, RIM recorded a pre-tax provision of $485 million related to the inventory valuation of its PlayBook tablets.
The PlayBook "doesn't do very much," Avi Greengart, research director of consumer devices with Current Analysis, told V2M. For example, he pointed out that the tablet doesn't include a native email application, is limited in the types of media that customers can use, and features a relatively small number of applications.
"Right now RIM has not delivered on its own promises just for base functionality for this product," Greengart said.
