BlackBerry maker RIM sees operating loss, shares slump
By Alastair Sharp
TORONTO (Reuters) - Research In Motion Ltd on Tuesday warned it could report an operating loss and said it had engaged bankers to help it review its business, the latest in a string of dismal messages from the once-dominant BlackBerry maker.
The struggling company, which virtually invented the concept of on-your-hip email with its first BlackBerry devices, also said it would cut a "significant" number of jobs, adding to a string of senior executives who resigned in recent weeks.
RIM shares, down more than 75 percent over the past 12 months and trading at 8-year lows, slumped nearly 13 percent to around $9.77 a share in after market trading.
"That is a disaster. It's really bad. We did not expect an operating loss this quickly," said Peter Misek, an analyst at Jefferies & Co.
Mark McKechnie, an analyst at ThinkEquity LLC, put RIM's value at "about $10 per share" - reflecting what its portfolio of patents might bring. At its peak in mid-2008, RIM stock changed hands for more than $140.
Before the warning, analysts had expected RIM's earnings to fall to 42 cents a share and revenue to slip to $3.64 billion, according to analyst views collated by Thomson Reuters I/B/E/S. RIM is due to release its first-quarter results on June 28.
RIM's acknowledgement of job cuts confirmed reports earlier this week that a reduction was coming as it repositions itself in a smartphone market where it now trails far behind Apple Inc and rivals using Google Inc's Android.
But it gave no figures for the scale of the job cuts or the likely size of the operating loss. Two sources with close connections to RIM have told Reuters that RIM, which currently employs around 16,500 people globally, plans to slash its workforce closer to 10,000 by early next year. Continued...