Research In Motion Limited (NASDAQ: RIMM) falls 14.35% in after-hour trading due to its forecast misses estimates.
In today’s earnings conference call, Research In Motion, a well-known company that manufactures BlackBerry smartphone, announced that its quarterly revenue may drop for the first time in nine years. Additionally, the company is planning to cut jobs in order to reduce costs.
The average analysts’ estimate for sales was $5.47 billion, but the company said that the revenue will be between $4.2 to $4.8 billion in the fiscal second quarter. Its forecast misses estimates due to BlackBerry sales have declined. Moreover, there are many competitors such as the Apple iPhones. Apple has been introducing new, popular models nearly every year, but RIM has not introduced a new, popular Blackberry model since last August. Obviously, RIM is losing its market shares all year long.
From February 2011 to June 2011, its shares dropped around 57% (from $70 per share to around $30 per share). There are definitely problems remain in this company – not enough new products, not enough advertisements, huge amount of employees, many competitors in the industry, not getting enough revenue, etc. The company is in trouble; it faces growth and shares drop problems. In order for this company to survive, it needs some revolutionized ideas and some new products to attract customers and to compete with other companies. Basically, this company needs to make a higher profit.
Company Website: http://www.rim.com/