RIM’s slump deepens
IAIN MARLOW — TELECOM REPORTER
From Friday's Globe and Mail
Published Thursday, Jun. 16, 2011 4:32PM EDT
Last updated Thursday, Jun. 16, 2011 7:46PM EDT
Research In Motion Ltd. (RIM-T34.37-0.09-0.26%) has embarked upon an unprecedented retreat, slashing its profit outlook and setting plans for job cuts as Canada’s most important technology company struggles through some of the greatest challenges in its history.
RIM, which once dominated the market for smart phones, is rapidly losing market share as Apple Inc.’s iPhone and devices powered by Google Inc.’s enormously popular Android operating system batter the Waterloo, Ont. technology giant. Investors have hammered RIM shares in recent weeks amid mounting concern about the company’s prospects, but results issued late Thursday triggered a new wave of worries about RIM’s future.
Revenues of $4.9-billion (U.S.) for the first fiscal quarter showed a rare decline from the previous quarter and fell well short of analysts’ expectations. Profit of $695-million in the quarter dropped 10 per cent from a year earlier.
And RIM sharply reduced its forecasts for the rest of the year, cutting expectations for full-year profit to between $5.25 and $6.00 a share from $7.50 a share expected less than two months ago. Revenue for the second quarter is expected to be in the range of $4.2-billion to $4.8-billion, nearly $1 billion below previous estimates.
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