Arab Today, arab today rim faces first quarterly revenue fall in 9 years
Last Updated : GMT 12:43:40
Arab Today, arab today
Arab Today, arab today

RIM faces first quarterly revenue fall in 9 years

Arab Today, arab today

Arab Today, arab today RIM faces first quarterly revenue fall in 9 years

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Research In Motion fell as much as 17 per cent in late trading yesterday after the BlackBerry smartphone maker said quarterly revenue may drop for the first time in nine years and unveiled plans to reduce jobs. Revenue will be $4.2 billion (Dh15.4 billion) to $4.8 billion in the fiscal second quarter, RIM said in a statement Thursday. That was less than the average analyst estimate for sales of $5.47 billion, according to a Bloomberg survey. Profit this quarter will be 75 cents to $1.05 a share. Analysts had predicted $1.40. RIM is losing market share in the US to Apple\'s iPhone and handsets running Google\'s Android software, in part because it hasn\'t introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models like the Curve. \"Its product portfolio is just not up to snuff with its key competitors,\" said Paul Taylor, chief investment officer at BMO Harris Private Banking in Toronto, who manages about $14.5 billion, including RIM shares. RIM, based in Waterloo, Ontario, plunged as much as $5.83 to $29.50 in late trading Thursday after the report. The stock closed at $35.33 in Nasdaq Stock Market trading. The shares have declined 39 per cent this year. RIM has come under increasing scrutiny from investors after its stock slumped, the company lost phone market share, and its new PlayBook tablet computer, a rival to Apple\'s iPad, was criticised by technology columnists. Last week, investor Northwest and Ethical Investments LP called for RIM to separate the roles of chairman and chief executive officer as analysts question whether RIM\'s co-CEO structure is the best way to manage the company. \"With dual CEOs, you have a challenge,\" said Brian Modoff, an analyst at Deutsche Bank Securities in San Francisco, who rates RIM a ‘sell.\' \"There are teams that are working on certain functions, but only reporting to one or the other CEO, so there is a duplication in structure.\" The company said it plans to eliminate an unspecified number of jobs and make organisational changes to accelerate product introductions. Benefits from the job cuts should start to appear in the third quarter, chief financial officer Brian Bidulka said on the call. \"They definitely have some low-hanging fruit in terms of cutting costs,\" Modoff said. \"A streamlined structure would be beneficial for the company.\" The company unveiled a new version of its Bold phone last month with both the physical keyboard loved by BlackBerry users and the touch screen that made the iPhone popular. The Bold and other new devices will only be available late in the quarter, co-CEO Jim Balsillie told analysts on a conference call yesterday. The forecast, \"means new devices won\'t make it into the second quarter,\" said Tero Kuittinen, an analyst at MKM Partners in Stamford, Connecticut. He has a ‘buy\' rating on the stock. \"This is a quarter they really needed new devices to get them in there and they won\'t.\" Balsillie reiterated that he and co-CEO Mike Lazaridis are committed to retaining the executive structure. He told analysts yesterday that, \"completing the transition and taking the company to the next level of success is also something neither of us can do alone.\" Lazaridis added that he and Balsillie have, \"never been more committed,\" to RIM. RIM\'s share of US smartphone subscribers dropped 4.7 percentage points to 25.7 per cent in April from three months earlier, according to ComScore. Full-year profit will be $5.25 to $6 a share, excluding some costs, RIM said, down from a previous forecast of $7.50. Analysts on average predicted $6.24. Net income in the first quarter, which ended in May, was $695 million, or $1.33 a share, compared with $769 million, or $1.38, a year earlier. Sales rose 16 per cent to $4.91 billion. The company said it shipped 500,000 PlayBooks last quarter after starting sales on April 19.. From / Gulf News

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