BlackBerry (RIMM) Headed Towards Irrelevance - Almost three years ago to the day, Research In Motion (RIMM) was a $140 stock. Now it's a $30 stock, and its future looks increasingly murky as more and more people are leaving their brand known for user difficulty for the easiness of Apple's iOS and Google's Anroid operating systems.
That's a pretty substantial decline even in this economy. Revenue has sunk to $4.91 billion, down from estimates easily over $5 billion. While earnings were slightly higher than expected at $1.33, that's still nothing compared to what the stock was just a few years ago. Revenue is down almost 20% from a year ago in an arguably worse economy. That's far from good in case you couldn't tell.
Yes, the maker of BlackBerry devices beat Street estimates for fiscal-first-quarter earnings. Earnings came in at $1.33 a share when Wall Street was looking for $1.32. But revenue was below Street estimates -- $4.91 billion, compared with the consensus outlook for $5.14 billion. That's a miss of $230 million, although it was up 15.9% from a year ago.
It gets worse. The Street was expecting second-quarter revenue of $5.442 billion, up nearly 18% from a year ago. Research In Motion late Thursday projected revenue at $4.2 billion to $4.8 billion. That basically says the company expects no revenue growth. It cut its earnings projection for the fiscal year from $7.50 a share to $4.25 to $6 a share.
So, no one should be surprised the shares were off 14.3% to $30.27 after hours after rising 0.5% to $35.33 in regular trading. "The company is going into the abyss of a transition, and even if they get a new model, it's a new model on the old platform," Colin Gillis, a frequent critic, told Reuters.
They're far from last in market share or earnings but compared to what they were, things aren't good. It's not out of the realm of possibility to see them sink into complete irrelevance. They've got to find a way to catch up to their more advanced competitors but they wouldn't be the first to fall to Apple and Google.
