Stock of Research In Motion faces more pressure after new delays, quarterly loss - InfoNews

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Stock of Research In Motion faces more pressure after new delays, quarterly loss

Three people on the floor of the New York Stock Exchange display their BlackBerry smartphones in this Wednesday, May 30, 2012 file photo. Troubled BlackBerry-maker Research In Motion says it's cutting 5,000 jobs from its global workforce as it restructures its business. THE CANADIAN PRESS/AP-Richard Drew
June 29, 2012 - 4:15 AM

TORONTO - Shares of Research In Motion (TSX:RIM) are expected to take a beating today as investors react to the BlackBerry-maker's dismal earnings results and another delay to its new smartphones.

The Waterloo, Ont.-based company also said it would lay off a third of its workforce — or about 5,000 employees — to contain costs as it pushes ahead with a complete revamp of the BlackBerry operating system.

The announcements came as a shock because the company had insisted it would release new phones by the end of this year.

RIM's stock tumbled in after-hours trading in New York.

The company, which reports in U.S. dollars, posted a loss of US$518 million or 99 cents per share for its latest quarter, steeply missing analyst expectations.

The results marked a decline from the profit of $695 million or $1.33 per share a year ago.

Chief executive Thorsten Heins told analysts on a conference call that he expects the company will face further pressure on its financial results over the next several quarters.

The new BlackBerry 10 operating system and phones have widely been considered a last-ditch effort to save the company, which has lost a significant portion of its marketshare to competitors like Apple's iPhone and devices using the Android operating system.

At least one analyst was not impressed with RIM's results last night.

"At this point there is a chance that we may never see a BB10 handset given RIM’s track record," wrote National Bank analyst Kris Thompson in a note.

"RIM is intent on launching a 'distinct' smartphone platform; all we see at this point is an extinct platform. Are consumers and enterprises really going to wait for another platform? No!"

Thompson upgraded his shares to a "sector perform" on the basis that the company could be broken up and sold for $8 per share, based on its cash holdings and intellectual property.

News from © The Canadian Press, 2012
The Canadian Press

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