Blackberry Maker's (RIMM) High Margin Days Could Be Gone Amid Expensive New Phones

By Henry Wilson
25 September 2008 @ 07:22 pm EDT

Research In Motion Inc shares fell 19.2 percent in after hours trading Wednesday after the firm reported a lower outlook due to higher costs for newer advanced phones.

RIMM fell $18.72 in afterhours trading on Wednesday after reporting that profit in the third quarter will be 89 cents to 97 cents per share on sales of $3.1 billion, below analyst estimates of 99 cents.

Factors contributing to the missed forecast include marketing costs for new phone models and the release of an Apple iPhone competitor called Bold.

"This is a surprise, and not a positive one," Canaccord Adams analyst Peter Misek told Reuters about the results. "For next quarter, gross margin ... is way lower than we thought."

CEO Jim Blasillie told analysts in a conference call that the company's newer handset costs are affecting margins since they can't pass them on to consumers and keep prices attractive for consumer.

Blackberry Maker's (RIMM) High Margin Days Could Be Gone Amid Expensive New Phones

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