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BlackBerry maker RIM posts 9.6% loss in Q1, cuts forecast

Research In Motion has reported a decline in net income to $695 million for the three months ended May 28, with profitability pulled down by delays in introducing new devices.

twitter-logoPTI | June 17, 2011 | Updated 14:50 IST

BlackBerry-maker Research In Motion (RIM) has reported a 9.6 per cent decline in net income to $695 million for the three months ended May 28, with profitability pulled down by delays in introducing new devices.

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The entity had posted a net income of $769 million for the corresponding year-ago period, the Canadian firm said in a statement on Thursday.

However, the company's revenues rose to $4.9 billion in the first quarter ended May 28, from $4.23 billion in the year-ago period, translating into a gain of 16 per cent.

During the quarter, RIM reported the shipment of 13.2 million smartphones, down from 14.9 million in the February quarter and much below its forecast. It sold 500,000 PlayBook tablets during the period under review.

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Looking ahead, the company forecast a profit of $5.25 to $6 a share for the full fiscal year, well below its previous forecast of $7.50 a share.

For the current quarter, RIM expects earnings of 75 cents to $1.05 per share and revenue of $4.2 billion to $4.8 billion, below analysts' expectations of $1.4 and $5.5 billion, respectively.

RIM said it will continue to witness a challenging environment through the current quarter, which ends in August, as the BlackBerry-maker faces the fallout of delays in product updates.

"2011-12 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," RIM Co-CEO Jim Balsillie said.

The company, which has been facing stiff competition in the smartphone segment from Apple's iPhone and Google Android devices, said it "will begin a programme to streamline operations across the organisation, which will include a headcount reduction."

However, RIM has not mentioned the number of jobs that will be eliminated.

"This realignment will be focused on taking out redundancies and a reallocation of resources to allow us to focus on the areas that offer the highest growth opportunities and align with RIM strategic objectives, such as accelerating new product introductions," RIM said.

RIM said devices launched in the coming months will bolster the company's growth.

"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," Balsillie added.

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