Struggling Canadian smartphone maker Research In Motion Ltd. (RIMM: Quote,RIM.TO: Quote) on Tuesday warned of a first quarter operating loss and revealed that it has hired J.P. Morgan Securities LLC and RBC Capital Markets to assist the company in reviewing business and financial performance.
"The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter," Thorsten Heins, RIM's President and CEO, said in a brief business update.
In March, the BlackBerry maker said it would no longer provide specific quantitative guidance due to a desire to focus on long term value creation and the current business environment.
Heins reiterated that the company's financial performance will continue to be challenging for the next few quarters.
Heins also said that there will be significant spending cuts and headcount reductions in some areas throughout the remainder of the fiscal year. However, the company will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10 and those related to the growth of its application developer community, he added.
The company expects to further increase its cash position in the first quarter from the about $2.1 billion we had at the end of fiscal 2012.
Regarding the hiring of J.P. Morgan Securities and RBC Capital Markets, Heins said, "These advisors have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives."
Heins said he will provide another more detailed business update when the company releases its first quarter financial results on June 28.
RIM was once the undisputed king of the smartphone market. Of late, the company is having a tough-time in the face of stiff competition from Apple Inc.'s (AAPL) iPhone and iPad, and devices powered by Google Inc.'s (GOOG) Android system.
In March, RIM reported a fourth quarter loss, hurt by lower revenue as well as goodwill impairment and inventory charges.
Heins, who was RIM's Co-COO before taking over as CEO in late January, said in March that the company was simultaneously conducting a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage its assets and maximize shareholder value.
Although Heins has not spoken about a possible sale of the company, he has not ruled that out either. RIM has been subjected to takeover speculation over the past year.
RIM shares closed Tuesday's regular trading session on the Nasdaq at US$11.23, up 23 cents or 2.09%. The stock is currently losing 86 cents or 7.66% in after hours trading. On the TSX, the company's shares closed the day at C$11.48, up 9 cents.
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by RTT Staff Writer
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