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Research in Motion (NSDQ: RIMM) continued to struggle during its third fiscal quarter after taking a huge charge earlier in the quarter related to the poor performance of its Playbook tablet. Co-CEOs Jim Balsillie and Mike Lazaridis are still at the helm of the struggling company, but promised yet again that they could turn the ship around.
For the three-month period ending November 26th, RIM reported revenue of $5.2 billion, down six percent from the same quarter last year. When it announced that it would be taking a $485 million charge related to Playbook inventory, it also said it wouldn’t meet its previous revenue guidance of between $5.3 billion to $5.6 billion. Financial analysts polled by *Yahoo* Finance, even taking that lowered expectation into account, still thought the company would take in $5.27 billion in revenue.
Net income for the quarter was $265 million, down substantially from net income of $911 million a year ago. Excluding the one-time charge related to the Playbook as well as a $54 million charge related to the three-day BlackBerry outage and a $7 million “cost-optimization charge,” adjusted net income was $667 million, or earnings per share of $1.27. Analysts were expecting earnings per share of $1.19.
And RIM’s outlook for the upcoming quarter was even worse. The company projected that it would ship between 11 million and 12 million smartphones, a steep decline from shipments of 14.1 million smartphones in its third quarter and perhaps a sign that BlackBerry inventory is piling up the same way that Playbook inventory did. Revenue is expected to be between $4.6 billion and $4.9 billion, and earnings per share are expected to be just $0.80 to $0.95.
Even taking into account the negative sentiment surrounding RIM’s current position in the mobile market, financial analysts were projecting a 7 percent drop in RIM’s revenue for the upcoming quarter, to $5.12 billion, and a 34 percent drop in earnings per share to $1.18. RIM’s own management took it a step further, projecting a 14 percent drop in revenue going into the next quarter and a stunning 50 percent drop in earnings per share.
But don’t worry, the company said in its earnings release.
“As part of our commitment to improving our performance to better meet the expectations of shareholders and customers, we continue to evaluate ways to improve in several areas of the Company’s operations,” Balsillie and Lazaridis said in a prepared statement. “It may take some time to realize the benefits of these efforts and the platform transition that we are undertaking, but we continue to believe that RIM has the right set of strengths and capabilities to maintain a leading role in the mobile communications industry.”
Stay tuned for what promises to be a surreal conference call at 2 p.m. PT.