RIM lowers earnings estimates for fiscal Q1

The price of shares of BlackBerry manufacturer, Research In Motion (RIM) plunged April 28 after the company issued an unexpected profits warning, leading to a temporary suspension in trading of its shares.

RIM now expects fully diluted earnings per share for Q1 to be in the range of US$1.30-US$1.37, lower than the range of US$1.47-US$1.55 previously forecasted by RIM on March 24, 2011.

This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecasted in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices.

Gross margin for the first quarter is expected to be similar to the 41.5 per cent previously guided.

This mix shift is also expected to result in revenue that is slightly below the range of US$5.2-US$5.6 billion guided on March 24. Expected shipments of BlackBerry PlayBook in the quarter continue to be in line with previous expectations and the company confirmed that it had not experienced any significant supply disruptions in Q1 due to the impact of the Japan earthquake.

RIM expects to achieve full year fully diluted earnings per share of approximately US$7.50, which reflects anticipated strong revenue growth in the third and fourth quarters of the fiscal year driven primarily by the launches of new BlackBerry smartphone products and prudent cost management.