RIM to Downsize after Low Q1 Results
RIM announced its Q1 results on Thursday coming in 12 per cent lower than the previous quarter. Revenue acquired throughout the quarter came from hardware, service and software services.
RIM reports that during the quarter the company shipped an estimated 13.2 million BlackBerry handheld devices and 500,000 BlackBerry Playbook tablets.
“Fiscal 2012 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." said Jim Balsillie, Co-CEO at Research In Motion in an official press release. "RIM’s business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. 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."
Part of the plan to make Research in Motion more profitable is the company’s streamlining of its operations. First and foremost RIM will eliminate redundancies of employment. It’s Cost Optimization Program will include a headcount reduction that will focus on redundancies and reallocation fo resources to allow for focus on areas of high growth opportunity. RIM expects to implement the program at the beginning of the second quarter with benefits appearing in Q3 and beyond.
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Another program RIM is focusing on is the Share Repurchase Program. Rim will pay for any shares purchased over NASDAQ for the prevailing market price at the time of purchase.
“RIM's Board of Directors believes that a share repurchase program at this time is in the best interests of
RIM and its shareholders, and will not impact RIM's ability to execute its growth plans. Any shares purchased under the program will increase the proportionate interest of, and may be advantageous to, all remaining shareholders of RIM,” said an official RIM statement.