correction: corrects the headline to say the company posted a loss, not wider loss.
Struggling Canadian smartphone maker Research In Motion Ltd. (RIMM: Quote,RIM.TO: Quote), said Thursday it slipped to a loss for the first quarter, stung mainly by a 43 percent plunge in sales and hefty impairment charges.
The company's quarterly loss was more than what the Street expected, with sales also short of estimates.
RIM, which is amid a restructuring process, also announced unprecedented job cuts totaling 5,000 by fiscal year 2013 as it seeks to cut costs by $1 billion. The company currently has about 16,500 staff globally.
Moving forward, CEO Thorsten Heins reiterated tough conditions for the next several quarters as RIM grapples with intense rivalry, lower handset volumes, and impacts from the delayed launch of BlackBerry 10.
Heins said he expects RIM to report an operating loss in the second quarter of fiscal 2013, citing investments in marketing, the transition to BlackBerry 10, and fixed expenses amid falling shipments.
Following the news, RIM shares are currently losing US$1.43 or 15.66% in after-hours trade on the Nasdaq.
Heins said RIM's first quarter loss, coming amid challenging market conditions, will prompt the company to realign resources and focus on strengths that include a decent BlackBerry subscriber base and network architecture.
Speaking on the job cuts, Heins said the company has begun reduction in management layers, streamlined its supply chain, and is outsourcing certain functions. RIM expects to incur job-cuts related charges of about $350 million by the end of fiscal 2013.
Heins did not speak of a possible sale of the company, but rumors abound of such an eventuality. Media reports recently said, among other things, RIM may separate its handset division from messaging network, and sell the former to Amazon Inc. (AMZN) or Facebook Inc. (FB).
Research In Motion, once a market leader in smartphones, has been struggling to compete with arch rival Apple's iPhone and iPad, as well as devices powered by Google's Android. According to research firm IDC, BlackBerry reportedly accounts for only 7 percent of global smartphone shipments at present.
During the first quarter ended June 2, 2012, RIM shipped 7.8 million BlackBerry smartphones, and 2 60, 000 BlackBerry PlayBook tablets.
The data pales in significance when compared with Apple which in its last reported second quarter sold over 35 million iPhones and nearly 12 million iPads.
Waterloo, Canada-based RIM reported first quarter net loss of US$518 million or US$0.99 per share, compared to net income of US$695 million or US$1.33 per share last year.
Results for the reporting quarter include after-tax charges of $326 million, mainly related to goodwill impairment.
Excluding items, loss for the reporting quarter was US$192 million or US$0.37 per share.
On average, 44 analysts polled by Thomson Reuters expected the company to report a loss of US$0.01 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter plunged 43 percent to US$2.8 billion from US$4.9 billion last year. Forty analysts estimated revenue of US$3.11 billion.
RIM closed Thursday on the Nasdaq at US$9.13, down 0.54 %, on a volume of 19.0 million shares. In after hours, the stock dropped US$1.43 or 15.66%. In the past year, the stock has traded in a range of US$8.83 - US$33.54.
On the TSX, the company's shares closed the day at C$9.46, up 0.21%.
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by RTT Staff Writer
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