RIM shares fall on profit projections

Shares of BlackBerry maker Research In Motion were down more than 11 per cent Friday as investors reacted to the company's disappointing third-quarter results and news of its falling share of the U.S. market.

CEOs looking at changes to firm's organization

Research in Motion co-CEO Mike Lazaridis has come under fire as his company' stock price has tumbled nearly 80 per cent. (Eric Risberg/Associated Press)

Shares of BlackBerry maker Research In Motion were down more than 11 per cent Friday as investors reacted to the company's disappointing third-quarter results and news of its falling share of the U.S. market.

The company's stock weakened by $1.83 to close at $13.97 on the Toronto Stock Exchange.

The BlackBerry maker's market share in the lucrative American smartphone market is about 10 per cent this year, down from 15 per cent in 2010, and RIM has said it will focus on winning over more customers south of the border.

"They're losing share in the U.S.," Evercore Partners analyst Alkesh Shah said from New York. "They know the U.S. is a premium market."

RIM reported after markets closed Thursday that it earned $265 million US, or 51 cents per share, in its most recent quarter, down more than 70 per cent from the same period a year earlier. RIM reports in U.S. dollars.

A year earlier, it made $911 million, or $1.74 per share.

Revenue totalled $5.17 billion, down from $5.5 billion and in line with analysts’ expectations of $5.26 billion.

Investors were disappointed as the company said it expected earnings per share for the fourth quarter to be in the range of 80 to 95 cents a share.

BlackBerry shipments to fall below expectations

Analysts had projected profit of $1.08 a share, according to Bloomberg data.

RIM estimates revenue in the current quarter will come in at between $4.6 to $4.9 billion.

The firm said BlackBerry smartphone shipments are expected to be between 11 million and 12 million, below the 13 million analysts had expected.

The company also said its new generation of BlackBerrys, which have been expected to boost flagging revenues, won't be in consumers' hands until late next year.

 "I can understand why they want to come up with a killer device," Shah said.

"The challenge is, even though the device may be amazing from an engineering specification point of view, it may not be attractive enough to a consumer from a user experience point of view."

Co-CEO Jim Balsille told analysts in a conference call that the firm is evaluating a broad range of options on changing RIM's organizational  structure and that he and fellow CEO Mike Lazaridis have asked for their respective salaries to be reduced to one dollar.

Both men have come under fire from investors and analysts calling for them to relinquish their joint chairmanship of the company's board or consider splitting up the company and selling off components.

RIM, which has faced intense competition from Apple's iPhone and devices using Google's Android technology,  had earlier warned investors that it will book a $485-million US charge before tax on the cost of discounting the price of PlayBooks by more than half to help boost sales.

With files from The Canadian Press