RIM suffers as it waits for a turnaround

Research in Motion (s rimm) struggled through a tough transitional quarter — with revenue, profits and shipments down as it waited for a new generation of handsets to kickstart sales. The smartphone maker reported second quarter fiscal 2012 revenue of $4.2 billion, which was down 15 percent from the previous quarter, and down 10 percent from the year-ago quarter. Profit plummeted to $329 million, down from $695 in the previous quarter and $797 million a year go.

Shipments of handsets came in at 10.6 million units, down from 12.1 million devices a year ago. And the PlayBook tablet mustered just 200,000 units, about what Apple (s AAPL) manages in a couple days of iPad sales.

The results fell considerably short of already lowered analysts expectations. Wall Street analysts had expected earnings of 88 cents a share on revenue of $4.47 billion. Excluding one-time charges, RIM reported adjusted earnings of 80 cents a share. Analysts had also expected 12 million phones and 600,000 tablets. This was after the company lowered its guidance for the second quarter during its last earnings call, to revenue of $4.4 to $4.6 billion and estimates of 11 million and 12.5 million phone units.

But there was some good news: RIM said its new BlackBerry 7 devices, which went on sale toward the end of the quarter, were selling well. The company is also still profitable, and reported services revenue of $1 billion for the first time. But RIM’s performance was dragged down by older devices that aren’t moving. And its tablet is having a hard time getting acceptance on the market. RIM is now hoping that it can build off its BlackBerry 7 launch and look ahead to more momentum when it transitions handsets to its QNX-based operating system next year.

Looking ahead, RIM projected third-quarter revenue between $5.3 to $5.6 billion, while unit shipments of handsets will be somewhere between 13.5 and 14.5 million units. Adjusted earnings per share for fiscal 2012 is expected to be closer to the low end of the previously guided range of $5.25 to $6 a share. That’s way below previous projections of $7.50 a share.

RIM has its work cut out for it. It faces a big iPhone launch in the coming weeks and an onslaught of Android (s goog) smartphones, including the latest Samsung Galaxy S II, which will debut on three of the four major carriers. Its BlackBerry 7 OS, while improved, still doesn’t match up to more modern platforms. We’ll know more this quarter if its audience of users stick with it, though it seems like many might not jump on a BlackBerry 7 device if the next generation of QNX devices is already on the horizon. That will be a big challenge for RIM, as it continues to manage its transition and move products based on its existing platform while gearing up for more advanced phones.

With each quarter that RIM waits for QNX, it just puts more pressure on itself. It is still somehow selling 10 million phones a quarter, but it has to hit a home run with its new operating system. And it has to hope that home run comes sooner rather than later.