Research in Motion (RIM) posted huge losses for its first quarter, admitting the outlook for the rest of the year...
was just as bleak.
In an earnings call to investors last night, the BlackBerry manufacturer confirmed revenues had fallen by 38% from the previous quarter, dropping the figure down to $2.8bn – last seen in its 2009 results. It also posted its first net loss since 2003 and admitted the outlook for the second quarter was still negative.
“The next several quarters will be very challenging due to the increasingly competitive environment and we expect [another] operating loss in the second quarter of fiscal 2013,” confirmed the company’s CFO, Brian Bidulka.
As well as the glum figures, RIM confirmed it would cut almost a third of its workforce by the end of 2012, equating to 5,000 job losses across the company, mainly hitting manufacturing.
However, it revealed new hires to the executive team, with Steve Zipperstein from Verizon coming on board as its chief legal officer, Kristian Tear being named as chief operating officer, and Frank Boulben taking on the role of chief marketing officer.
BlackBerry 10 mobile OS launch delayed
RIM also disclosed that the launch of its BlackBerry 10 platform, initially expected later this year, would be delayed until at least the first quarter of 2013.
RIM CEO Thorsten Heins said the new operating system (OS) “remains our number one priority”, but a long integration process and the challenge of making it ready for global release had taken longer than planned.
“These issues are not related to quality, [but] it has become clear a schedule working towards this calendar year is no longer realistic,” he said on last night’s call.
“I will not deliver a product to the market which is not ready to fulfil the needs of our customers [and] there will be no compromise on this issue.”
When it is released, Heins confirmed the BlackBerry 10 OS would only launch on high-end smartphone devices to minimise the cost of rolling it out. He also said the BlackBerry portfolio would be cut down to reduce marketing spend, as well as R&D.
“This was a challenging quarter. I am not satisfied with the financial report we are giving you today,” he added.
“I understand this is an incredibly difficult message to deliver, but it is necessary to change scale and refocus the company on areas of highest opportunity."
Heins said it wanted to move forward as a "lean and nimble" organisation that can act quickly, and assured investors that it would not go ahead with a change of this magnitude if it didn’t think it was critical for RIM's future.
After the results, the company's stock price fell dramatically, dropping 17% in after-hours trading to hit a low of $7.75, which valued the company at less than $4bn.