RIM's outlook disappoints, shares tumble

TORONTO, CANADA: Blackberry maker Research In Motion issued a weaker-than-expected outlook on Thursday as it spends heavily on the launch of its PlayBook tablet, sending its shares tumbling as much as 12 per cent.

While the Canadian technology company's net profit jumped 32 per cent and it shipped a solid number of its BlackBerry smartphones, investor attention turned to its less-than-rosy forecasts for the current quarter.

PlayBook due in U.S. stores on April 19

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 iPad. The PlayBook is due in U.S. stores on April 19.

"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 made its name with secure, reliable communications for the world's business and government elites but now fights in a broader market against the likes of Apple's iPhone and a slew of devices using Google's Android platform.

Potential disruption from Japan

The company shipped 14.9 million BlackBerry smartphones in the quarter. It has struggled to impress consumers in the competitive U.S. market where it is steadily losing market share.

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 percent.

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.

RIM reported net profit of $934 million, or $1.78 per share, for the fiscal fourth quarter ended February 26, on revenue of $5.6 billion, it said after the stock market closed on Thursday.

Analysts, on average, had expected earnings of $1.76 per share and revenue of $5.64 billion, according to Thomson Reuters I/B/E/S.

"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.

Shares of the Canadian company plummeted 12 percent in after-hours Nasdaq trade to $56.20.