BlackBerry shares plunge 15 percent on lower revenue forecast
Thursday, 12 February 2009, 23:28 IST
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Toronto: Shares of BlackBerry maker Research In Motion (RIM) plunged by 15 percent on the Toronto Stock Exchange Wednesday after the global wireless communication giant forecast less-than-expected profits for the fourth quarter of 2008. In a statement, the Waterloo-based Canadian company said that it "expects revenue for the fourth quarter to be at or near the mid-point of the previously guided range. "Gross margin and earnings per share for the quarter are expected to be at the low end of the previously guided ranges." The company, which has just reached the landmark of 50-million subscriber base, will release the quarterly results in the first week of April. But mere the statement of less-than-expected profits was enough for jittery investors to dump RIM shares on the Toronto markets. The shares dived $10.88 to close at $60. Last year, the RIM shares once rose as high as $150.30 to plunge later to $44.23 as the financial crisis gripped world markets. BlackBerry co-CEO Jim Balsillie tried to calm jittery shareholders by saying that "RIM achieved a very strong start to the holiday buying season and the momentum carried on stronger than expected during the past seven weeks despite a seasonally slower timeframe and the challenging economic environment." He said, "We are pleased with our leadership and momentum in the market after shipping our 50 millionth BlackBerry smartphone in January and introducing a range of new products that are achieving exceptional early results and helping attract record levels of new customers to the BlackBerry platform." Wednesday's statement was downward revision of the company's earlier statement of per share earnings of 83 cents to 91 cents for the fourth quarter of 2008 on a total revenue of $3.3 billion to $3.5 billion. But now the wireless giant expects the revenue at "the lower end" of its forecast despite over 20 percent increase in its subscriber base. RIM said it had seen record levels of "subscriber additions throughout the month of December and continued to see strong levels following the holiday buying season." It said the new BlackBerry products that were launched in the fiscal third quarter continue to be well received in the market and post-holiday subscriber performance in both North America and international markets has exceeded its expectations.
Source: IANS
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