Research In Motion Slashes Its Forecast Amid BlackBerry Weakness, Plans Layoffs
After noting several weeks ago that it was in for a rough patch, Research In Motion on Thursday confirmed things are getting worse, as it slashed its forecast for the remainder of the year.
For the past quarter, RIM said it earned $695 million, or $1.33 per share, on revenue of $4.9 billion. Earnings were roughly in line with its lowered forecast, while sales were lower than even some analysts’ already curtailed forecasts.
The company had warned in late April that it would not meet sales and revenue expectations for the quarter amid weakening BlackBerry sales. Given that warning, analysts had expected the company to report earnings of about $1.32 per share on revenue of $5.15 billion.
“Fiscal 2012 has gotten off to a challenging start,” co-CEO Jim Balsillie said in a statement on Thursday. “The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.”
At the time of the April warning, the company said it still expected to be able to deliver full-year earnings of $7.50 per share, though analysts have since questioned that prediction as well.
On Thursday, RIM admitted that it, too, now sees that goal as unreachable. The company said it expects earnings for the full year to be just $5.25 to $6 per share, excluding charges. For the second quarter, which runs through August 27, the company expects revenue of $4.2 billion to $4.8 billion, with per-share earnings of between 75 cents and $1.05 per share. Both those estimates are well below what analysts had been projecting.
The company also plans to cut an unspecified number of jobs in an effort to curtail costs.
RIM said it shipped 13.2 million BlackBerry devices last quarter, roughly what analysts were expecting. As for the company’s heavily touted PlayBook tablet, RIM said it shipped 500,000 units during the quarter.
Earlier on Thursday the company confirmed that Don Morrison, one of its three chief operating officers, is taking a medical leave, though the company said it expects him to return later this year. The company is also facing upset from shareholders, including one that is seeking to have the company split the roles of CEO and Chairman and put an outsider into the board chair position.
Balsillie did say RIM expects to see its profits grow again toward the end of the fiscal year.
“We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012,” he said.