Investment research firm Wedge Partners said on Friday that Research In Motion Ltd(NASDAQ:BBRY) may have decided to scale down production plans for its Z10 smartphone.
This had the effect of driving down the shares of the Canadian handset maker.
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The analyst, Brian Blair said that the company may have cut its production down by 4 to 6 million units, though he did not specify the source of the information.
“If accurate, these cuts would mark a meaningful hit to BlackBerry’s own expectations, and full-year units will come in well below consensus views,” said Blair in his note to investors.
“The recent carrier launches in the U.S. have provided no evidence of meaningful sell-through, and a production cut could simply be a reaction to weak sales, post the U.S. launch, and an effort to avoid a channel inventory buildup.”
Blackberry is involved in the attempt to make a turnaround and is banking on the success of is Z10 and Q10 smartphones to effect that turnaround. It unveiled its new Blackberry 10 operating system in January this year and followed that up with the launch of the two smartphones.
The stock fell as low as $12.50 and rose above $16 in the past couple of months even as analysts are hotly debating whether the company will be able to make any kind of dent in a market which is dominated by Apple and Samsung.
BlackBerry said April 12 it would ask securities regulators to investigate a report from Detwiler Fenton & Co. that its new phones have high return rates, arguing that the “false” information may have been released in a deliberate attempt to manipulate its stock price.
Sentiment: Strong Sell