RIM Stock Hammered After Second-Quarter Profit Falls 59%

**Waqas** · September 16, 2011

Research in Motion’s troubles continued Friday as its stock fell as much as 23% in pre-market trading, after the company reported a 59% drop in its second-quarter profits and a year-over-year decline in BlackBerry shipments — the first time that’s happened in almost a decade.

RIM shipped 10.6 million BlackBerry devices in the quarter. That compares to 12.1 million in the same period last year and 13.2 million in the previous quarter. The company also shipped just 200,000 PlayBook tablets in Q2, compared to 500,000 in the first quarter.

The decline affected RIM’s bottom line. The company posted a profit of $329 million for the quarter compared to $797 million for the same quarter in 2010. Revenues fell 10% to $4.17 billion.

In a call with analysts, the company’s CEOs, Jim Balsillie and Mike Lazaridis, blamed the results on customers who were waiting for the next round of BlackBerry phones. Such phones, including the refreshed BlackBerry Curve line and new BlackBerry Bold, just became available a few weeks ago and had little effect on the Q2 results. Balsillie also told analysts that a software upgrade is planned for the PlayBook in October. RIM is expected to introduce phones based on its QNX OS in 2012 as well.

BlackBerry’s loss of market share comes as no surprise after various analyst reports showed a drop in consumer adoption of BlackBerry. RIM’s share of the smartphone market dropped from 25.7% to 21.7% in just three months, according to a recent report.

The following chart details RIM’s share price performance over the last few months: