The Waterloo, Ontario-based technology firm said it sold fewer Playbook tablets than it had expected in the third quarter, and that it will need to increase promotional spending to increase sales in the fourth quarter. As a result, it said it would take a pretax, mostly non-cash charge of $485 million for inventory valuation.
Shares, which traded as low as $17.50 at one point ahead of Wall Street’s open, recovered some to trade at $19.97 recently. Prior to Friday’s action, over the last 12 months, the shares have traded between $70.54, and $17.56.
“As previously disclosed, RIM has a high level of BlackBerry PlayBook inventory. The Company now believes that an increase in promotional activity is required to drive sell-through to end customers. This is due to several factors, including recent shifts in the competitive dynamics of the tablet market and a delay in the release of the PlayBook OS 2.0 software,” the firm said in a statement.
In a statement released ahead of the market open, RIM RIMM -6.14% said it would not meet its adjusted 2012 target of $5.25 to $6 a share. Wall Street analysts expected the firm to earn $4.59 a share in 2012, according to a survey by FactSet Research.
For the third quarter, the company said it shipped 14.1 million BlackBerry smartphones, in line with its target range. RIM expects third-quarter revenue to come in slightly lower than its forecast of $5.3 billion to $5.6 billion. It’ll also take a third-quarter, non-cash charge of $485 million related to its inventory valuation of BlackBerry PlayBook tablets.
The company reported $1.5 billion in cash at the end of the third quarter, up $80 million.
“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy,” Mike Lazaridis, Co-CEO at Research In Motion, said in a statement For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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