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RIM Falls to Seven-Year Low as Analysts Cut Profit Forecasts

The BlackBerry Bold 9900 smartphone. Photographer: Simon Dawson/Bloomberg
The BlackBerry Bold 9900 smartphone. Photographer: Simon Dawson/Bloomberg

Research In Motion Ltd. fell to a seven-year low after two analysts cut profit estimates and the smartphone maker said some customers couldn’t turn on their BlackBerry Bold devices.

Mike Abramsky, an analyst at RBC Capital Markets in Toronto, lowered his price target on the stock to $23 from $29 because of slower sales and lower earnings projections.

“While Bold 9900 sales remain healthy, checks indicate that domestic post-launch sales have slowed amidst competitive headwinds,” Abramsky, who has a “sector perform” rating on the stock, wrote in a note today.

RIM is counting on the Bold, which was introduced in September in the U.S., and a clutch of other new BlackBerrys to stop consumers migrating to Apple Inc.’s iPhone and devices built on Google Inc.’s Android platform.

RIM fell 4.6 percent to $17.36 at the close in New York, the lowest level since May 2004. The stock has dropped 70 percent this year.

Abramsky lowered his sales estimates for the current quarter to $5.3 billion from $5.4 billion and his profit-per-share forecast to $1.20 from $1.28. Analysts on average predict the company will on Dec. 15 report profit of $1.21 and sales of $5.32 billion, according to the average of estimates compiled by Bloomberg.

Alex Gauna, a JMP Securities LLC analyst, cut his rating on the stock to “market underperform” and reduced his profit estimates, citing competition from lower-priced Android devices.

“Low-priced smartphones are increasingly threatening to Research In Motion revenues and gross margins,” San Francisco-based Gauna wrote in a note today.

BlackBerry Bold

RIM also said today that some BlackBerry Bold 9900 and 9930 devices failed to turn on, according to an e-mailed statement from the Waterloo, Ontario-based company.

A “limited number of customers have reported an issue where their device does not power on,” which RIM is working to fix with a software update, the company said.

RIM’s market-share decline has put pressure on the company to shake up management and prompted investors such as Jaguar Financial Corp. to call for it to divide into separate companies, seek a merger or sell itself.

The company’s U.S. market share sank to 9.2 percent in the third quarter from 24 percent a year earlier as consumers opted for the iPhone and Android phones from Samsung Electronics Co. and HTC Corp., according to research firm Canalys.

RIM posted its first quarterly revenue decline in nine years in September, and is struggling to move its BlackBerry lineup onto a new operating system and reignite interest in its PlayBook tablet computer.

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