Research In Motion on Thursday saw its stock take its biggest dip in four years on the Nasdaq after forecasting second-quarter earnings estimates below analyst expectations.
The Waterloo, Ontario-based maker of the popular BlackBerry said it expects 84 cents a share in the second quarter, below a Bloomberg survey of analyst estimates for 92 cents.
RIM shares fell $19.03, or 13.35 percent, to $123.46, the biggest fall since November 2004.
The report marked RIM’s first earnings disappointment in five quarters.
The stock had more than doubled in the past year after the company launched more consumer-friendly devices through cheaper models such as the Curve and Pearl.
Although RIM’s second-quarter earnings forecast disappointed, the company keeps growing fast with first-quarter revenue that doubled to $2.24 billion from $1.08 billion in the same period a year ago. The company on Wednesday reported net income of $482.5 million, or 84 cents a share, compared with earnings of $223.2 million, or 39 cents a share, in the same period a year ago.
Also, RIM reported it added 2.3 million BlackBerry subscribers to end the first quarter with more than 16 million aficionados.
RIM made its name with the iconic BlackBerry smart phone, first released in 2002.
Smart phones combine Internet, e-mail, and computer-like applications.
The BlackBerry, the No. 1 smart phone in the U.S, is now dangerously tailed by Apple’s iPhone, according to IDC.
RIM’s increase in spending to fight Apple’s stylish iPhone is likely the cause of its earnings forecast disapointment.
Although BlackBerrys are more targeted at corporate users, Apple’s release of a new $199 3G iPhone on July 11 seems to have gotten RIM worried anyway.
RIM likely fears that small and medium-sized business will eventually turn to an increasingly corporate-friendly iPhone over BlackBerry.
Apple has sold over 6 million units of the sleek, silver device between its launch in June 2007and May 2008, when it ran out of them, victim of its commercial success.
To maintain its lead the Canadian smart phone maker has been spending more on marketing and product development with the expected release of two new phones in the coming months.
RIM's Bold, the answer to the iPhone, will go on sale later than the company previously planned.
The $300 to $400 device, which was supposed to be released in July, has been postponed until August. The phone is suffering from battery life problems as well as overheating, according to the Boy Genius Report. The Thunder, the first touch screen BlackBerry, has no official release date.