Lackluster First Quarter For RIM Spells Trouble Ahead

June 17th, 2011 at 9:17 am

Research In Motion, the maker of the erstwhile popular business smartphone Blackberry, has reported a dismal showing for the first quarter of the new fiscal year. It posted earnings that were below analyst’s estimates. This may further dim the forecast for the next quarter for the company which has recently been going through some tough times.

For the first quarter of the fiscal year 2012, RIM reported a net income of $695 million. This showed some substantial decrease in the net income posted in the fourth quarter of the previous year which stood at $934 million. This amounts to a 26 percent drop in net income quarter for quarter. Total revenues for the first quarter came in at $4.9 billion, 12.5 percent lower than the total revenues of $5.6 billion made in the previous quarter.

The start of the new fiscal year is off to a bad start for RIM. And because of the recent first quarter financial results, the company may be downgrading its second quarter estimates as they are expecting the dismal results to trickle into the next quarter. RIM might also be on the way of laying off some of their workforce and reallocating resources to focus on high growth areas of the business.

According to the company, the dismal showing for the first quarter may be traced back to several new product launch delays that has affected sales as well as expectations from its customers. Even its shipments for the 4G version of its PlayBook tablet may be delayed by Fall. But the company is hoping that its recent shipments may help improve next quarter revenues.

RIM has reported that it has so far shipped around 13.2 million Blackberry devices in the first quarter along with around 500,000 PlayBook tablets. But this numbers only indicated shipments to retailers and not the total number of units sold, which will then reflect on its revenue report. Since April, the company has seen a loss of about a third of its market value. The only way to prevent it from going further down would be to show better numbers for the coming quarter.


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