UPDATE:Research in Motion will lay off some 5,000 employees as it restructures itself this year.
The announcement comes as the tech giant reports an adjusted loss per share of $0.37 for the quarter ended May 31, missing analyst expectations for a loss of $0.07.
The news sent shares down nearly 20 per cent in after hours trade, falling to nine-year lows.
Net sales tumbled more than 42 per cent year-on-year, falling to $2.81 billion.
“I am not satisfied with these results and continue to work aggressively with all areas of the organisation and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” RIM’s CEO Thorsten Heins said.
During the quarter, RIM shipped 7.8 million Blackberry devices, below the 8.74 million units Wall Street had projected. Playbook sales beat expectations slightly, as the firm sold 260,000 units, but were far lower than the 500,000 shipped in the year ago period.
Sales continue face pressure from the consumer shift to Apple and Android powered devices, which together account for more than three-quarters of the smartphone market.
The Blackberry manufacturer said it would delay its new operating system, Blackberry 10, until the first quarter of 2013.
“The integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated,” RIM said in a statement.
CONFERENCE CALL COVERAGE:
The company’s conference call has started, Business Insider will be live-blogging the RIM’s call below (newest updates at the bottom).
5:05 p.m.: RIM’s CEO Thorsten Heins has started speaking on the call, saying, “We are not standing still.”
5:06 p.m.: Revenue in the company’s international division has declined, and churn remains high nearly across the board. RIM is refreshing products in the U.K. and throughout Europe.
5:08 p.m.: Blackberry 10 remains the company’s top priority, CEO Thorsten Heins says. Heins notes that code is the main reason for the delay, not feature issues in the new operating system. When RIM introduces the new OS, it will be launched globally in the first months of 2012.
5:12 p.m.: Heins says the company will focus on winning first-time smartphone users and upgrades from former Blackberry devices. He does not say if the company has a program to win share from Apple or Android.
5:14 p.m.: Heins on layoffs: “I understand this is an incredibly difficult message to deliver, but it is necessary.” “It is necessary to change the scale and refocus the company on its areas of highest opportunity.” Heins expects the layoffs to be completed over the next nine months. RIM will inform impacted staff as soon as possible.
5:16 p.m.: Heins on strategic review with J.P. Morgan and RBC: “Actively working on them with this evaluation.” Earlier this year, Research In Motion hired both banks to help it on a strategic review.
5:19 p.m.: RIM will limit the number of devices it offers in the future, and says that it is “convinced” it has a future as a hardware-software company. RIM will consider licensing the Blackberry 10 platform.
5:21 p.m.: CEO Thorsten Heins has turned the conference call over to CFO Brian Bidulka.
5:32 p.m.: RIM believes it can grow its user base through international gains, conceding tremendous difficulty in North America.
5:33 p.m.: The question and answer section has started.
5:35 p.m.: Credit Suisse is asking if hardware had negative gross margins this quarter, which the firm’s analyst says he’s backed into. Credit Suisse also asks if a breakup of RIM is really in the cards.
5:36 p.m.: Bidulka says hardware margins “were at a low point.” However, he will not say if products did turn negative.
5:38 p.m.: Heins does not say if a breakup is actually expected within management, noting the strategic teams are still working. “This is not the time to share any detail,” he says. Heins notes the Board must also weigh in.
5:40 p.m.: RIM also forecasts an operating loss in the fiscal second quarter.
5:47 p.m.: A Bank of America Merrill Lynch analyst just told RIM: “Don’t you think it’s a little too late to try to develop a new ecosystem…”
5:57 p.m.: RIM says it will have about 11,500 employees after layoffs are completed.
6:00 p.m.: RIM has concluded its first quarter earnings conference call.
Blackberry maker Research In Motion will report fiscal first quarter results after the closing bell today, with analysts expecting the beleaguered tech giant to record a loss of $0.07 per share.
Sale are also expected to decelerate more than 37 per cent at the Waterloo, Ontario based firm, falling more than $1 billion to $3.05 billion.
Earlier this year, the company issued guidance saying it would suffer a loss during the quarter and lay off at least 2,000 employees.
“RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters,” the company’s CEO Thorsten Heins said in May. “The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this.”
Research In Motion is also exploring strategic options with J.P. Morgan and RBC, including a possible sale.
Shares are down marginally in afternoon trade.