WATERLOO (dpa-AFX) - BlackBerry maker Research In Motion Ltd. (RIMM, RIM.TO) said Thursday after the markets closed that its second quarter profit dropped 59% from last year, as sales declined and margins deteriorated amid stiff competition from rivals. The company's quarterly earnings per share, excluding items, also came in below analysts' expectations as did its quarterly revenue.
At the same time, the company forecast third quarter earnings roughly in line with analysts' estimate, and said it now expects full year adjusted earnings to be at the low end of its previous outlook range. The company's shares tumbled more than 18% in after hours trading.
The Waterloo, Canada-based company reported net income for the second quarter of US$329 million or US$0.63 per share, compared to US$797 million or US$1.46 per share for the year-ago quarter.
The latest quarter results include the impact of a pre-tax one-time charge of US$118 million for the company's cost optimization program that was implemented in the quarter. Research in Motion said in July that it will cut 2000 jobs as part of its cost optimization program. The company also said it was conducting a rejig of its senior management team in order to realign its organization and operations.
Excluding items, adjusted net income for the latest quarter was US$419 million or US$0.80 per share.
On average, 50 analysts polled by Thomson Reuters expected the company to earn US$0.87 per share for the second quarter. Analysts' estimates typically exclude special items.
Gross margin for the second quarter fell to 38.7% from 44.5% in the prior year quarter.
Revenue for the second quarter fell 10% to US$4.17 billion from US$4.62 billion in the same quarter last year. Second quarter revenue dropped 15% sequentially. Forty-five analysts had a consensus estimate of US$4.47 billion for the second quarter.
'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. Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models,' said Jim Balsillie, Co-CEO at Research In Motion.
During the quarter, RIM shipped about 10.6 million BlackBerry smartphones and about 200,000 BlackBerry PlayBook tablets.
Of late, RIM is having a tough-time both in the smartphone as well as tablet computer markets, with intense competition from Apple Inc. (AAPL) and other major players.
Cupertino, California-based Apple, RIM's major rival in the smartphone and tablets market, sold 20.34 million iPhones and 9.25 million iPads during its third quarter ended June 25.
Looking forward to the third quarter, RIM forecast revenue of US$5.3 billion to US$5.6 billion and adjusted earnings of US$1.20 to US$1.40 per share. Analysts currently expect the company to earn US$1.36 per share on revenue of US$5.27 billion for the third quarter.
Gross margin percentage for the third quarter is expected to be about 37% and BlackBerry smartphone shipments for the quarter are expected to be between 13.5 million and 14.5 million units, the company said.
The company also said it now expects full year fiscal 2012 adjusted earnings to be towards the low end of its prior outlook range of US$5.25 to US$6.00 per share. Analysts currently expect the company to earn US$5.10 per share for the fiscal year 2012.
RIM shares closed Thursday's regular trading session on the Nasdaq at US$29.54, down 18 cents. The stock is losing $5.34 or 18.08% in after hours trading. On the TSX, the company's shares closed the day at C$29.40, down 9 cents.
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