June 18 (Bloomberg) -- Research In Motion Ltd., the maker of BlackBerry phones, forecast second-quarter profit and sales that fell short of some analysts’ estimates, sending the shares down as much as 5.5 percent in extended trading.

Profit in the period that ends Aug. 29 will be 94 cents to $1.03 a share on sales of $3.45 billion to $3.7 billion, Waterloo, Ontario-based RIM said today in a statement. Analysts on average estimated profit of 98 cents and sales of $3.61 billion.

RIM is spending more to develop and market devices as competition for consumer loyalty intensifies from Apple Inc.’s iPhone and Palm Inc.’s new Pre. Those expenses crimped RIM’s profitability in the first quarter and may have disappointed some investors, said Matt Thornton, an analyst at Avian Securities LLC.

“The stock had doubled this year and when expectations get that high and you don’t exceed them, you take it on the chin,” Boston-based Thornton said in an interview. He rates the stock “positive.”

RIM dropped as much as $4.21 to $72.34 in late trading after losing 66 cents to $76.55 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have climbed 89 percent this year.

The company expects as many as 4.1 million net new subscribers in the second quarter, less than the 4.2 million estimate of Mike Abramsky, an analyst at RBC Capital Markets in Toronto. RIM added 3.8 million in the quarter ended May 30, also less than Abramsky estimated.

Growing Pressure

Tomorrow, Apple will begin selling a faster version of the iPhone with longer battery life. Last week, the Cupertino, California-based company cut the price of its current model to $99.

The Palm Pre, which went on sale June 6, allows users to shuffle through applications like a deck of cards and has a touch screen and slide-out keyboard. RIM co-Chief Executive Officer Jim Balsillie says the company is prepared for the competition.

“We’ve demonstrated a lot of surging strength in the last two quarters and I don’t see anyone here taking their foot off the gas,” Balsillie said today on a conference call with analysts. “The lineup over the next 14-15 months is spectacular.”

This summer, RIM plans to release the Tour, a phone that is compatible with third-generation networks abroad and features the sharpest resolution of any BlackBerry.

So-called smart phones, which have advanced Web and e-mail features, may provide the only area of growth this year in the mobile-phone market. Shipments climbed 13 percent in the first quarter as mobile-phone industry overall shrank, according to researcher Gartner Inc.

First-Quarter Results

Net income in the fiscal first quarter rose 33 percent to $643 million, or $1.12 a share, from $482.5 million, or 84 cents, a year earlier, RIM said. Sales climbed 53 percent to $3.42 billion, in line with estimates.

Excluding costs related to stock-based compensation and currency tax rules, profit of 98 cents a share topped the 94- cent average of estimates compiled by Bloomberg.

First-quarter research and development costs climbed 72 percent to $219.8 million, while marketing and administration expenses increased 57 percent to $514.3 million, RIM said. Gross margin, or sales minus production costs, dropped to 43.6 percent from 50.7 percent

The company expects a second-quarter margin of 43 percent to 44 percent.

“The pressure on RIM is growing,” said Nirav Parikh, an equity analyst at TCW Group Inc. in Los Angeles. “It’s not just the iPhone anymore but a second competitor with something that is possibly even better than the iPhone operating system,” he said, referring to the Pre. TCW has about $110 billion under management, including RIM shares.

(RIM held a conference call today to discuss results. To hear a replay after 7pm New York time, dial +1-416-640-1917. The passcode is 21289979#. A replay can also be accessed at: http://www.rim.com/investors/events/index.shtml.)

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

Last Updated: June 18, 2009 18:33 EDT