Friday, June 17, 2011
After slashing its profit forecast for the year on Thursday and saying it would be shedding jobs, Research in Motion Ltd. (RIMM) saw its share price drop sharply again early Friday. In pre-market Nasdaq trading Friday morning, RIM was down $6.34, or 18% to $28.99.
On Thursday, the Waterloo, Ont.-based BlackBerry maker sliced its earnings outlook for the year and said it would start laying off employees, in grim results that suggest its aging smartphone line and delays in introducing new devices are eroding its business faster than expected.
RIM, which has been losing ground to rivals and cutting its financial targets, said it pulled in less revenue and sold fewer BlackBerry phones than expected for the first fiscal quarter ended May 28. It posted the first quarterly drop in BlackBerry sales since 2005.
To help boost results, RIM said Thursday it plans to "streamline operations" by reducing headcount and reallocating resources to high-growth projects, in a program it began at the beginning of the quarter.
Analysts weighed in early Friday, cutting their ratings and targets on the stock. JPMorgan downgraded to neutral, saying RIM's reduced estimates and delays for the Bold 9900 handset "put two final nails in the coffin" of its bullish thesis. Scotia lowered RIM to sector perform, while Citigroup cut to sell.
By: DocMemory
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