6:24 p.m. | Updated
OTTAWA — Research in Motion, the beleaguered BlackBerry maker that is trying to revive its sales, warned investors on Tuesday that it was likely to post its second-consecutive quarterly loss next month.
In a bid to avoid the fate of Palm, a once high flying mobile device maker that was broken up and sold before effectively vanishing, RIM also said on Tuesday that it had retained J.P. Morgan Securities and RBC Capital Markets, a unit of the Royal Bank of Canada, to help guide it through a previously announced strategic review.
The review may lead to partnerships with other companies, the licensing of BlackBerry software or “strategic business model alternatives,” an apparent reference to the possible sale of all or part of the company.
“These advisers have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives,” Research in Motion said in a statement.
In the latest announcement, Thorsten Heins, who became president and chief executive this year, said that declining sales and lower prices of BlackBerry handsets were likely to lead to the loss. The company’s loss during its previous quarter resulted from special charges.
“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,” he said.
Shaw Wu, an analyst with Sterne Agee in San Francisco, said it appeared that the RIM’s finances were quickly deteriorating.
“The biggest shock is that this was a company that was still able to say that even though they were in a tough position, they were still profitable,” Mr. Wu said. “Now they can’t claim that any more. This is what happened to Palm when things turned really sour.”
The company’s statement indicated that it was likely to increase the $2.1 billion in cash it had at the end of its last quarter. But Mr. Wu said that given the forecast for a loss, that increase would probably result from RIM collecting debts rather than growing its business.
Mr. Heins reiterated that the BlackBerry 10 phones were on schedule for their much delayed introduction. But he once again did not provide a date for that event beyond indicating that it would take place “in the latter part of calendar 2012.”
BlackBerry sales continued to grow in developing markets, Mr. Heins said, but that good news was “partially offset by high churn in the United States.” Customers in those markets also favor lower-cost BlackBerrys, which generate correspondingly lower profit margins for RIM.
Mr. Heins also said the company aimed to cut costs by $1 billion during the current fiscal year. That is likely to fuel widespread speculation in Canada’s technology industry that substantial job reductions are likely to come at RIM, which is based in Waterloo, Ontario.
“While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community,” Mr. Heins said in the statement.
RIM’s first quarter of its 2013 fiscal year closes on Saturday. The company will report its results on June 28.
Article source: http://dealbook.nytimes.com/2012/05/29/research-in-motion-taps-jpmorgan-and-rbc-for-strategic-review/?partner=rss&emc=rss
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