RIM Posts Dismal BlackBerry Results

By Josh Long Comments
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Research in Motion on Thursday reported a significant financial loss, revealed plans to cut 5,000 jobs and disclosed that its BlackBerry 10 platform would be further delayed until the first quarter of the calendar year 2013.

It was a dismal quarter as revenues plunged 33 percent to $2.8 billion from $4.2 billion in the previous quarter on a $518 million net loss.

Adding to the financial woes were revelations that the technology RIM hopes will revive its beleaguered brand -- BlackBerry 10 -- has been delayed. RIM previously was expected to release its first BB 10 smartphone later this year.

"I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities," RIM CEO Thorsten Heins said in a statement.

The Canadian company revealed plans to cut 5,000 jobs as part of a strategy to yield $1 billion in cost savings. The job cuts are expected to be completed by the end of RIM's fiscal 2013 year, and RIM anticipates incurring $350 million in restructuring charges mostly as a result of the workforce reduction.

In the quarter ending June 2, RIM sold a modest 260,00 PlayBook tablets and 7.8 million smartphones. In the previous quarter, RIM shipped 11.1 million smartphones and roughly 500,000 PlayBooks.

In spite of the sluggish sales, RIM now serves a global BlackBerry base of roughly 78 million.

The future, though, looks mighty grim.

"The Company expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM’s monthly infrastructure access fees, and the Company’s plans to continue to aggressively drive sales of BlackBerry 7 handheld devices," RIM said its earnings statement.

Waterloo, Ontario-based RIM also warned that it anticipates incurring an operating loss in the second quarter of its fiscal year.

The company has retained bankers to evaluate its strategic options, fueling speculation that it could be sold amid doubts that the BlackBerry maker can revitalize its smartphone brand.

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