* RIM Q4 EPS $1.78 vs analyst view $1.76
* Says earnings in current qtr likely $1.47-$1.55
* Revenue of $5.6 bln vs analyst view of $5.64 bln
* Ships 14.9 mln BlackBerrys, up 4.9 pct from previous qtr
* Shares drop 12 pct in after-hours trade
(In U.S. dollars; adds detail, background, analyst)
By Alastair Sharp
TORONTO, March 24 Blackberry maker Research In
Motion RIM.TO RIMM.O on Thursday warned its earnings would
slip as it spends heavily on the launch of its PlayBook tablet,
sending its shares tumbling as much as 12 percent.
While the Canadian technology company's net profit in the
quarter ended in February jumped 32 percent, and it shipped a
solid number of its BlackBerry smartphones, investor attention
zoomed in on its less-than-rosy forecasts for the current
"The February quarter was fine. The May quarter guidance --
shocking might be too strong a word -- but it was very weak,"
said Matthew Thornton, an analyst at Avian Securities.
RIM's profit margins will take a hit and the company warned
its earnings will miss analyst forecasts as it spends heavily
to overhaul its operating system and introduce its tablet in a
burgeoning market created by Apple's (AAPL.O) iPad. The
PlayBook is due in North American stores on April
For RIM graphic: r.reuters.com/waz68r
Instant view: [ID:nN24188686]
Special report, in PDF: link.reuters.com/jam58r
RIM co-chief Jim Balsillie portrayed the near-term outlook
as an anomaly needed to lay the groundwork for a resurgence.
"We believe the launch of new handsets beginning in Q2 and
into the second half of the year, as well as the positive halo
from the PlayBook launch, (will provide) an opportunity for
improved growth in North America," he told a conference call.
RIM aims to shift the QNX-powered platform of its PlayBook
on to its BlackBerry smartphones by early in 2012, he said.
Some figure the task is too great.
"What people are worried here is you've got one company,
albeit a really good company, but they're trying to take on all
the OS development, all the ecosystem development, work with
the developers on apps, build the hardware, work with the
carriers. ... Any one company that tries to do this by
themselves will probably lose," said Ed Snyder, an analyst from
DIFFICULTY IN U.S. MARKET
In the meantime, RIM is finding it increasingly difficult
to impress consumers with its smartphones, particularly in the
U.S. market. There the BlackBerry is steadily losing market
share to snazzier competitors including the iPhone and Android
But it is nurturing solid growth in global markets, where
customers and carriers are impressed with its mid-range
devices, cheaper data plans and applications such as BlackBerry
Messenger, a free instant messaging service.
More than half its sales came from outside North America
and Britain in the latest quarter, the company said.
RIM reported net profit of $934 million, or $1.78 per
share, for the fiscal fourth quarter ended February 26, on
revenue of $5.56 billion, it said.
Analysts, on average, had expected earnings of $1.76 per
share and revenue of $5.64 billion, according to Thomson
"Generally looks like Q4 was in line with expectations, Q1
is a little lower on EPS due to research and development, along
with sales and marketing associated with the tablet
initiative," said Tavis McCourt, an analyst at Morgan Keegan.
In an unusual move perhaps intended to inspire confidence,
RIM also forecast earnings for its full fiscal year, which
started in late February.
It said it would earn more than $7.50 a share fully
diluted, higher than the $6.81 average expectation of analysts.
It made $6.34 a share in the year just ended.
"It's like 'I'm going to make it up in the last half of the
year, don't worry' -- what gives them the confidence that
that's going to happen?," said Colin Gillis from BGC Partners
in New York.
Balsillie said he expects RIM to sell "millions" of
PlayBooks in the next 12 months but said the company would not
provide regular forecasts on the tablet sales.
POTENTIAL DISRUPTION FROM JAPAN
The company shipped 14.9 million BlackBerry smartphones in
the quarter, and said that would likely fall to between 13.5
million and 14.5 million in the current quarter.
RIM said it expected to earn between $1.47 and $1.55 per
share in the current quarter -- well below what analysts had
forecast. It sees its gross margin slipping to around 41.5
RIM said it gave a wider guidance range due to potential
disruption to RIM's supply chain in the aftermath of the
Japanese earthquake this month. It said it had inventory on
hand but delivery times for more supplies are uncertain.
Shares of the Canadian company plummeted as much as 12
percent in after-hours Nasdaq trade before settling 10 percent
lower at $57.50.
(Additional reporting by Euan Rocha, John Tilak, Susan Taylor;
Editing by Frank McGurty)