Research in Motion has announced profits on Friday and the company’s stock dropped quickly as the market opened in New York and Toronto. After RIM announced a nearly 60 percent drop in profits for the second quarter, the stock dropped almost 22 percent to $23 per share. The company stated that lower than expected shipments of their popular BlackBerry handsets was a primary cause for the drop in profits. The stock has already started to drop on Thursday after the market closed and the company announced the poor results.
Research in Motion, which has been trying to offer new products to customers, has slowly been losing market share to Apple and Android powered devices. The RIM Playbook tablet computer also showed poor results for the second quarter and those results are clearly showing that RIM is having a hard time keeping up in the super competitive mobile industry. Many other things contributed to the stock dropping over the course of this year. Profit warnings, products being released later than expected and the lack of success the PlayBook tablet had when it released in April. Many analysts were still giving recommendations to buy the stock and that kept it from dropping throughout August. Because of the unexpected profit reports on Friday, the analysts have lifted many of those recommendations.
Research in Motion was not available for comment on the news as of Friday. RIM executives did make statements that BlackBerry phones were not available for sale long enough to prove helpful in the second quarter results. They also mentioned that phone sales are likely to increase throughout the remainder of the year and promised more software upgrades which usually help to boost sales of the various handsets available to consumers. Certain experts did not have the same feelings and said that even though the outlook seemed optimistic, it would take more than just boosted sales of BlackBerry handsets to turn this year around for the company.
Experts at UBS said that, “While management confirmed our expectation of strong BB7 shipments in F’Q2, we remain skeptical of guidance given rapid decline in older models sales and risk to sell through.” This being said, it looks like RIM is in need of drastic changes in order to get back in the race that Apple and Android have been leading for some time.