Research In Motion shares plunged 30 3/4, or 38 percent, to 51 1/4 Wednesday after a couple brokerage firms cut the stock and lowered their fiscal 2000 earnings estimates.
Research In Motion (Nasdaq: RIMM) managed to top analysts' estimates in its fourth-quarter Tuesday, earning $3.2 million, or 5 cents a share, on sales of $25.8 million.
However, shrinking profit margins in the competitive wireless device market spooked some investors.
Credit Suisse First Boston analyst Ray Sharma cut his fiscal 2001 revenue outlook to $166 million from $194 million and his earnings estimate from 35 cents a share to 15 cents a share.
In a research note, Sharma said the e-mail pager maker would see slowing demand for its BlackBerry device as customers delay purchases in anticipation of its RIM 967 device in May.
Legg Mason downgraded Research In Motion from a "buy" recommendation to "outperform."
Banc of America Securities also cut its revenue outlook for the company to $164 million from earlier estimates of $180 million, based on expectations that shipments to American Mobile Satellite will be delayed.
The bank also said that higher marketing costs, totaling $20 million in fiscal 2001, will lead to an erosion of earnings that are now expected to be 17 cents a share in fiscal 2001 from an earlier estimate of 40 cents a share.
"We clearly view the delayed 'hockey' stick as a disappointment, but have not changed our fundamental opinion on Research in Motion," said a Banc of America report.
Banc of America said it maintained a "strong buy' rating on the shares with a $100 target price.
"We view this delay as temporary, and look for an acceleration of sales beginning in the June timeframe," the report said.
Its shares hit a 52-week high of 175 3/4 in March after trading at a low of 9 1/4 last April.
All 10 analysts following the stock maintain either a "buy" or "strong buy" recommendation.>