Thorsten Heins, CEO of Research In Motion, is pictured in New York in January, 2013. The company’s first quarter earnings failed to meet analyst expectations after the much-hyped release of its new operating system.Mark Lennihan/The Associated Press
Research In Motion Ltd.'s turnround faltered as the Canadian smartphone maker failed to report a profit in the first quarter which sent its shares tumbling more than 26 per cent in early trading.
The Waterloo, Ont.-based company, which launched its new BlackBerry 10 operating system five months ago, reported a net loss of $84-million (U.S.), or 16 cents a share, in the three months to June 1 compared with a loss of $518-million, or 99 cents a share, a year earlier.
Excluding one-time items, the company reported a loss from continuing operations of $67-million, or 13 cents a share, on revenue of $3.1-billion. Analysts had expected earnings of 6 cents a share on revenue of $3.36-billion.
Thorsten Heins, chief executive, has bet on the success of RIM's new operating system and a new line of phones to reignite the company's fortunes. It has struggled to compete against Apple Inc.'s iPhone, Samsung Electronics Co. Ltd.'s Galaxy smartphones and other devices powered by Google Inc.'s Android operating system.
RIM shipped 6.8 million smartphones during the quarter, up from 6 million a year ago, thanks to the launch of its touchscreen phones. However, Wall Street had forecast an increase to 7.45 million.
Mr. Heins said it was "really too early to say" whether BlackBerry 10 was meeting the company's expectations. BlackBerry gave no breakdown on how many Z10 and Q10 devices it sold.
The chief executive, who was a surprise pick when he took over in January, 2012, insisted that the company remains in the "early stages of its transition."
Mr. Heins also announced that the company had abandoned development work on its PlayBook tablet, which was introduced in 2011 but recorded disappointing sales.
RIM was having to spend more to market its new products, which as reflected in the forecast of an operating loss in the current quarter.
In the latest quarter, RIM's revenues in the key North American market grew by 30 per cent, those from Asia-Pacific grew by 35 per cent and the European, Middle East and Africa segment grew by 9 per cent.
However, revenues from Latin America fell by 6 per cent as Venezuelan foreign currency restrictions reduced revenue recognition by $72-million and reduced company gross margin by 2 per cent.
RIM shares, which have risen by almost two-thirds in the last year on hopes for the company's recovery, stood at $10.51 on Friday in New York.