RIM operating at a loss as fiscal 1Q 2013 earnings far worse than expected

Posted:
in General Discussion edited January 2014
Canadian telecom Research in Motion took a substantial hit during its first fiscal quarter of 2013 with a non-GAAP loss of $0.37 per share on only $2.81 billion of revenue, numbers that are drastically lower than anticipated results from financial analysts and represent the first net loss for the company since 2004.

The BlackBerry maker warned in May that earnings for the first quarter of 2013 would be dismal after announcing massive layoff and technology setbacks, but the actual numbers posted on Thursday far exceed the three cents per share drop Street analysts expected reports The Wall Street Journal.

If a pre-tax charge of $335 million is added to the non-GAAP figures, the total loss per share suffered by the company comes out to a staggering $0.99, magnitudes lower than analysts' expectations of a one cent loss of per share (three cents non-GAAP) on revenue of $3.1 billion.

Chief Executive Officer Thorstein Heins said in a press release regarding the fiscals that the company is banking on organizational restructuring and the upcoming BlackBerry 10 OS to right the sinking ship, though at the same time admitted that BB10 is now pushed back to a 2013 launch. Adding to RIM's troubles was the confirmation that 5,000 jobs would be cut by the end of fiscal 2013 as part of a 40 percent workforce reduction planned to occur over the next year.

The company announced its Cost Optimization and Resource Efficiency (CORE) program in March with the focus of driving an additional $1 billion in revenue by the end of 2013 by streamlining operations and reducing workforce and overhead costs. RIM is expected to spend approximately $350 million by the end of fiscal 2013 on the program with most of those costs going toward global workforce buyouts.

Handset shipments also took a nose dive since last quarter as the company managed to move only 7.8 million devices, down from 11.1 million at the end of its last fiscal quarter of 2011 and 13.2 million a year ago. PlayBook shipments were even harder-hit, eking out about 260,000 units which is a little more than half the number shipped from the year-ago quarter. It was reported at the end of May that RIM was holding $1 billion worth of unsold handsets and tablets.

BlackBerry


RIM's tablet sales are likely to fall precipitously given the litany of new entries into the market including Google's recently-announced Android 4.1 Jelly Bean-powered Nexus 7, Microsoft's self-branded Surface and a possible smaller iPad offering from Apple rumored to debut later this year.

When BB10 finally launches next year it too will face an uphill battle as the handset will miss the lucrative holiday season which will be dominated by Android handsets and an expected next-generation iPhone. Apple will also be launching iOS 6 in the coming months which will further widen the gap between the mobile operating system and any possible offering from RIM.

?RIM?s development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience,? said Heins. ?We are encouraged by the traction that the BlackBerry 10 platform is gaining with application developers and content partners following the successful BlackBerry Jam sessions that we have held around the world since the beginning of May. Similarly, the reception of the BlackBerry 10 platform by our key carrier partners has been very positive and they are looking forward to going to market with BlackBerry 10 smartphones in the first quarter of calendar 2013.?

The first quarter miss comes out to a 30 sequential drop, worse than than the 21 sequential drop seen in the quarter four 2012.

RIM stock closed the day at $9.13 to be down only five percent but has dropped another ten percent in after-market trading and now sits at $7.75.
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Comments

  • Reply 1 of 34


    I don't like to see an injured animal in pain. Somebody just shoot it

  • Reply 2 of 34
    sticknicksticknick Posts: 123member
    2013 eh? If this keeps up, RIM, you won't even be around in 2013.
  • Reply 3 of 34


    QNX is cool and all....


     


    But right now I think there only real option would be to merge their software innovations into their own version of Android.

  • Reply 4 of 34
    galaxytabgalaxytab Posts: 122member
    I hope they can turn the colossal clusterfrack around for the sake of the employees.

    Apple sideswiped RIM hard.
  • Reply 5 of 34
    quadra 610quadra 610 Posts: 6,734member

    Quote:

    Originally Posted by MaroonMushroom View Post


    QNX is cool and all....


     


    But right now I think there only real option would be to merge their software innovations into their own version of Android.



     


    QNX has to completely and utterly redefine the entire mobile paradigm for it to actually matter to anyone anymore. 


     


    RIM needs to change the game, Apple-style. 


     


    Seems like an unfair requirement, but this isn't 15 years ago. 

  • Reply 6 of 34

    Quote:

    Originally Posted by MaroonMushroom View Post


    QNX is cool and all....


     


    But right now I think there only real option would be to merge their software innovations into their own version of Android.



     


    Right. Look at how that is working for Sony, for HTC, for Motorola... While they are at it, they should adopt Windows Phone too. That's doing wonders for Nokia.

  • Reply 7 of 34
    apple ][apple ][ Posts: 8,360member


    I never shorted a stock before, but whoever did right before close made a ton of money in mere minutes.

  • Reply 8 of 34
    jmgregory1jmgregory1 Posts: 448member


    Ha - I called it months ago - there was no way they were going to hit a 2012 release date for their new OS and subsequently they'll have no new handsets to offer either.  This will further suppress their numbers to the point where the board will force another change and most likely try to strike some deal with another company to sell their IP.  Not sure there is much else they could do - because investors are going to have a tough time putting more money into a venture that hasn't been able to successfully execute on a plan for the past 2 years.

  • Reply 9 of 34

    Quote:

    Originally Posted by GalaxyTab View Post



    I hope they can turn the colossal clusterfrack around for the sake of the employees.

    Apple sideswiped RIM hard.


     


    Absolutely true, but RIM should have gotten out of the fast lane because Apple doesn't slow down for anyone.

  • Reply 10 of 34
    davegeedavegee Posts: 2,765member
    [QUOTE]RIM co-CEO doesn’t see threat from Apple’s iPhone
    Monday, February 12, 2007 · 3:43 pm · 63 Comments

    “The recent launch of Apple’s iPhone does not pose a threat to Research In Motion Ltd.’s consumer-geared BlackBerry Pearl and simply marks the entry of yet another competitor into the smartphone market, RIM’s co-chief executive said in an interview,” Wojtek Dabrowski reports for Reuters.

    Dabrowski reports, “‘It’s kind of one more entrant into an already very busy space with lots of choice for consumers,’ Jim Balsillie said of Apple. ‘But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.’”[/QUOTE]

    Credit: http://macdailynews.com/2007/02/12/rim_co_ceo_doesnt_see_threat_from_apples_iphone/

    The only quote that tops it would be Mr Del's circa 1997

    [quote]
    And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one.
    "What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.
    [/quote]

    Lol
  • Reply 11 of 34
    gazoobeegazoobee Posts: 3,754member

    Quote:

    Originally Posted by MaroonMushroom View Post


    QNX is cool and all....


     


    But right now I think there only real option would be to merge their software innovations into their own version of Android.



     


    No. It's far beyond that.  


     


    People were expecting them to do badly today and that it wold lead almost certainly to a collapse or a buy out.  Then the news is announced that they did 12 times worse than even that expectation.  


     


    RIM is completely dead. Period.  


     


    They will be bought out or simply close the door before the end of the year.  


    "BB10 delayed until 2013" is just polite code for "you will never see BB10"

  • Reply 12 of 34
    eriamjheriamjh Posts: 1,041member


    They should just close the company and return the money to the shareholders...  no, wait!

  • Reply 13 of 34
    capnbobcapnbob Posts: 385member


    BTW - I think this is RIM's Q1 2013 results, not 2012. That year was over, early.


     


    FY13 is the only way they see 2013 at this rate. They have 3 more quarters until BB10 makes any impact. Can they even make that?

  • Reply 14 of 34
    chabigchabig Posts: 615member


    From the press release, "Research In Motion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobile communications market ..."


     


    Considering the direction they're going, I'd say RIM and Nokia are outdoing one another as "leaders".

  • Reply 15 of 34
    normmnormm Posts: 510member


    I've been following the Nokia Lumia 900 on Amazon for the past couple of months, checking about once a week, and its generally been ranked between #6 and #8 under "Cell Phones with Service", behind a bunch of Android phones and just behind the Blackberry Curve.  I just checked and the Curve is now at #34.

  • Reply 16 of 34
    wovelwovel Posts: 956member

    Quote:

    Originally Posted by GalaxyTab View Post



    I hope they can turn the colossal clusterfrack around for the sake of the employees.

    Apple sideswiped RIM hard.


    Only because they held their hands over their eyes screaming "Nah, Nah, Nah Can't See You".  They got sideswiped because they had no vision.  Even when the path was shown to them, they dismissed it (see below).


     


    Quote:

    Originally Posted by DaveGee View Post




    Quote:

    RIM co-CEO doesn’t see threat from Apple’s iPhone

    Monday, February 12, 2007 · 3:43 pm · 63 Comments

    “The recent launch of Apple’s iPhone does not pose a threat to Research In Motion Ltd.’s consumer-geared BlackBerry Pearl and simply marks the entry of yet another competitor into the smartphone market, RIM’s co-chief executive said in an interview,” Wojtek Dabrowski reports for Reuters.

    Dabrowski reports, “‘It’s kind of one more entrant into an already very busy space with lots of choice for consumers,’ Jim Balsillie said of Apple. ‘But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.’”


    Credit: http://macdailynews.com/2007/02/12/rim_co_ceo_doesnt_see_threat_from_apples_iphone/

    The only quote that tops it would be Mr Del's circa 1997

    Lol

  • Reply 17 of 34
    asdasdasdasd Posts: 4,950member
    The blackberry won't go away because some people want the keyboard. They will just be a smaller company. As it happens they have some loyalty amongst BBM users.
  • Reply 18 of 34

    Quote:


    Chief Executive Officer Thorstein Heins said in a press release regarding the fiscals that the company is banking on organizational restructuring and the upcoming BlackBerry 10 OS to right the sinking ship, though at the same time admitted that BB10 is now pushed back to a 2013 launch. Adding to RIM's troubles was the confirmation that 5,000 jobs would be cut by the end of fiscal 2013 as part of a 40 percent workforce reduction planned to occur over the next year.



     


    If they were planning for 10,000 engineers to take four months to turn out the BB10, now they are planning on 6000 engineers to take 12 months to get it out the door, how long will it take to get the job done with no engineers?

  • Reply 19 of 34
    This news is like when the Titanic split in half before it sank. Get out now.
  • Reply 20 of 34
    aaarrrggghaaarrrgggh Posts: 1,555member
    quadra 610 wrote: »
    QNX is cool and all....

    But right now I think there only real option would be to merge their software innovations into their own version of Android.

    QNX has to completely and utterly redefine the entire mobile paradigm for it to actually matter to anyone anymore. 

    RIM needs to change the game, Apple-style. 

    Seems like an unfair requirement, but this isn't 15 years ago. 

    You forgot one important thing-- they need to change the game in the next six months, with dwindling cash and half the workforce. Really is a shame how far they have fallen in five years.
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