Research In Motion reports lower earnings
Posted September 15, 2011 4:44 pm.
This article is more than 5 years old.
Research In Motion Ltd. saw its net profit plunge by more than half in the second-quarter as the Canadian technology icon took a big charge for cutting 2,000 jobs this summer.
The BlackBerry maker, which keeps its books in U.S. dollars, reported Thursday its second-quarter net earnings dropped 58 per cent to US$329 million or 63 cents per diluted share for the three months ended Aug. 31.
That was down from $797 million or $1.46 per share a year ago and was below analyst expectations for the consumer technology company.
Revenues, however, rose to $4.62 billion from $4.17 billion.
RIM’s bottom line was hit by a pre-tax one-time charge of $118 million related to a cost cutting plan. Excluding the charge, RIM said it earned $419 million or 80 cents a share.
Analysts’ estimates compiled by Thomson Reuters had on average expected US$4.5 billion in revenue and a profit of 90 cents per share.
RIM shares were down sharply in after-hours trading, falling as much as 16 per cent. The stock had closed down nine cents at C$29.40 on the Toronto Stock Exchange.
The Waterloo, Ont., company announced in late July it planned to cut 2,000 jobs this year, or about 11 per cent of its global workforce, in a bid to cut costs in a highly competitive smartphone market.
In an outlook for the its third quarter, the company said it expected revenue to be in the range of $5.3 billion to $5.6 billion on BlackBerry smartphone shipments between 13.5 million and 14.5 million units.
Adjusted earnings per share for the third quarter, excluding the impact of charges related to the company’s cost cutting program, is expected to be in the range of $1.20 to $1.40 per share.
A year without a brand new BlackBerry launch hurt the Canadian technology icon as rival Apple and Android devices picked up ground.
During the quarter, RIM shipped approximately 10.6 million BlackBerry smartphones and approximately 200,000 PlayBook tablets.
“We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products,” co-chief executive Jim Balsillie said in a statement.
“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models.”
The BlackBerry brand has dropped 25 per cent of its value to $3.3 billion, down to 10th place in the top 15 Canadian brands, says the latest analysis from the Brand Finance Canada index.
With files from Craig Wong
