Research In Motion posts first-quarter net loss of $518m
More bad news for the once-dominant smartphone maker, as it prepares to slash 5,000 jobs.
As BlackBerry sales falter, the Canadian smartphone maker Research In Motion (RIM) has sunk deeper and deeper into trouble. The once-dominant tech company has reported a net loss of $518m for the fiscal first quarter ended 2 June, a startling turn for the worse compared to a net income of $695m for the same period last year.
Diluted earnings per share were $0.99 (2011: $1.33) and revenue declined by a third to $2.81bn (2011: $4.91bn). The revenue breakdown for the quarter was approximately 59 per cent for hardware, 36 per cent for service and 5 per cent for software and other revenue.
During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets. Yet its decision to put back the release of the BlackBerry 10 to early 2013 has proved a devastating setback. As part of its cost-cutting programme, the company is planning to cut approximately 5,000 positions – almost a third of its workforce – by the end of fiscal 2013. RIM expects to incur restructuring-related charges of approximately $350m.
Thorsten Heins, president and CEO of RIM, said:
Our first-quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organisation 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.
Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.