Toronto, April 30 (IANS) As expected, shares of Research In Motion (RIM) tanked Friday after the BlackBerry maker slashed its outlook for the current quarter a day earlier.
On the Toronto Stock Exchange, RIM stock plunged 14.4 percent to $46.09 after investors ditched Canada's top technology which is going through what its co-CEO Jim Balsillie calls "hyper turbulence'' in the smart phone market thanks to onslaught by Apple's iPhone and Google Android handsets.
In the revised outlook issued Thursday, RIM expects to earn in the range of $1.30-$1.37, lower than the range of $1.47-$1.55 previously forecasted March 24, 2011.
As a result, the Waterloo-based RIM expects its quarterly revenue to be below the range of $5.2-5.6 billion, with earnings per share dropping by about seven percent.
RIM's plunging shares forced many analysts Friday to downgrade the stock.
RBC Capital Markets - an investment bank of the top Royal Bank of Canada - which had previously rated RIM stock as its top pick with a target of $90, downgraded it to 'sector perform' with the price target of $55.
In a note, RBC Capital Markets said, "We were wrong, as mis-execution has undermined sentiment recovery. Our (new) sector perform rating (of RIM stock) reflects our view that Research in Motion shares will likely remain pressured pending improved investor visibility on the company's earnings momentum.''
The note said that the slashed outlook by RIM just four weeks after its previous forecast "raises questions over Research in Motion's visibility to its own business, and predictability of its maintained $7.50 fiscal 2012 outlook.
"There was product launch mis-execution. Research in Motion also warned of pending smartphone launch delays (to late second- or third- quarter). PlayBook is a promising tablet contender, but Research in Motion bears some responsibility for its less-than-favorable debut, confusion over its positioning and criticisms it was not fully ready for market.''
However, the rating firm said, "The company's value and potential remains. We continue to see positives in the story as Research in Motion remains an enterprise and consumer smartphone leader with an international franchise, built-in advantages, and loyal 60 million user base.''
Bernstein Research analyst Pierre Ferragu also downgraded RIM. By issuing a slashed outlook, he said, RIM has recognized that "BlackBerry was suffering from competition in the US for the first time last night.''
The US smart phone market accounts for 40 percent of all BlackBerry sales.
With RIM's fortunes sinking on markets, all eyes are now on its next week's BlackBerry World conference in Florida where the company is expected to unveil new smart phones and a new powerful BlackBerry operating system.