RIM's Q2 Performance Poor, Plans Layoff

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While Blackberry maker Research In Motion’s (RIM) first quarter number were much lower than expected, the second quarter projections are even worse. According to a BusinessInsider report, the BlackBerry maker expects second quarter revenues to be almost $1 billion below consensus, sending the stock 15 percent down.

As per the report, the company is planning a layoff to streamline operations across the organization. BusinessInsider reporter Dan Frommer wrote that “RIM's turnaround is going slower than expected, and product delays are leading to low device shipments and revenue.” Financial reports indicate that last quarter RIM shipped 13.2 million BlackBerries, below expectations.

Meanwhile, last quarter, the BlackBerry manufacturer said it shipped about 500,000 PlayBook tablets. However, the company does not provide any breakdown to show how many of those were sold to end users, Frommer wrote.

A press release statement from RIM’s co-CEO Jim Balsillie said, “Fiscal 2012 has gotten off to a challenging start. 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.”

He further added, “RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. 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.”

In the first quarter, RIM reported revenues of $4.9 billion while expectation was $5.15 billion. The company shipped 13.2 million units as against 13.5 million expected units. Likewise, in the second quarter, the BlackBerry maker reported revenues over $4.2 billion versus $5.46 consensus. Though the number of units shipped in this quarter were not provide, the expectation was 13.5-14 million units, according to BusinessInsider report.




Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell
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