RIM shares plunge after reporting quarterly loss

Friday 28 June 2013 18.53
RIM chief executive Thosten Heins says things better than last year, despite quarterly loss
RIM chief executive Thosten Heins says things better than last year, despite quarterly loss

Shares of BlackBerry maker Research In Motion have plunged after the company posted a loss and warned of future losses despite releasing its make-or-break new smartphones this year.

RIM also announced it is essentially discontinuing making new versions of its slow-selling tablet device call the Playbook.

Analysts were looking for insight into how phones running RIM's new Blackberry 10 operating system are selling - but the figures were not good.

RIM said it sold 6.8 million phones overall versus 7.8 million last year. That includes older models.

In the conference call, it said about 2.7 million new devices were Blackberry 10 models. RIM's new Blackberry 10 operating system is widely seen as critical to the company's comeback.

RIM chief executive Thosten Heins said on a conference call with analysts that the "transition takes time" and noted things are better compared to last year when "we were told the company was finished."

But shares of Research in Motion dropped 26% on Wall Street shortly after today's opening.

The Canadian company said that it lost $84m, or 16 cents a share, in the three months ended June 1 on revenue of $3.1 billion. It lost $518m, or 99 cents per share, on revenue of $2.8 billion a year ago. Analysts expected RIM to earn 5 cents a share on revenue of $3.37 billion.

RIM also said it anticipates it will generate an operating loss in the second quarter. Heins noted the highly competitive smartphone market makes it difficult to estimate revenue and levels of profitability.

Heins also announced on the call that he is essentially discontinuing RIM's failed tablet offering, the Playbook. The Playbook has not sold well.

"Our teams have spent a great deal of time and energy looking at solutions that could move the BlackBerry 10 experience to Playbook, but unfortunately I am not satisfied with the level of performance and user experience and I made the difficult decision to stop these efforts and focus on our core hardware portfolio," Heins said.

He said they will continue to support the PlayBook on the existing software platforms and configurations.