Ina Fried

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Research In Motion Earnings at Low End of Forecast as Cash Drops by Half

BlackBerry manufacturer Research In Motion on Thursday reported sales and earnings at the low end of its forecast, and below what many analysts had been expecting.

The smartphone and tablet maker said that revenue for the quarter was $4.2 billion, with net income of $329 million, or 63 cents per share. On an adjusted basis, per-share earnings came to 80 cents per share.

Analysts had been looking for per-share earnings of about 87 cents, after RIM said to expect adjusted per-share earnings of between 75 cents and $1.05. When it last reported earnings, the company also cut its forecast and announced plans for cost cuts, including layoffs.

“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models,” co-CEO Jim Balsillie said in a statement. “We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year.”

However, PlayBook shipments were just 200,000 units for the past quarter, well below what many analysts had been hoping for. The company said it shipped about 10.6 million BlackBerry phones, also below many forecasts.

RIM also noted that its cash fell by more than half from the prior quarter, to $1.4 billion as of August 27 — down from $2.9 billion a quarter ago. About $780 million of the drop came from RIM’s investment as part of a consortium that is buying Nortel’s patents.

The company also guided analysts to expect continued struggles. Revenue for the current quarter, which ends Nov. 26, is seen in the range of $5.3 billion to $5.6 billion, with per-share earnings, before charges, of somewhere between $1.20 to $1.40. For the full fiscal year, the company said it now sees per-share earnings at the low end of its last forecast of between $5.25 and $6.

On the plus side, the company said it is seeing strong interest for new products running an updated version of its BlackBerry OS.

“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,” Balsillie said.

The company will face another round of tough questions in an earnings conference call set to begin at about 2 pm PT. Shares dropped more than 10 percent in after-hours trading following the earnings report, changing hands recently at $26.26; down $3.28, or 11.1 percent from where they closed in regular trading.

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