* RIM sees operating loss, "significant" job cuts ahead
* RIM hires JP Morgan, Royal Bank of Canada as advisers
* Shares down almost 13 percent after market
By Alastair Sharp
TORONTO, May 29 Research In Motion Ltd
on Tuesday warned it could report an operating loss and
said it had engaged bankers to help it review its business, the
latest in a string of dismal messages from the once-dominant
The struggling company, which virtually invented the concept
of on-your-hip email with its first BlackBerry devices, also
said it wo uld cut a "significant" number of jobs, adding to a
string of senior executives who resigned in recent weeks.
RIM shares, down more than 75 percent over the past 12
months and trading at 8-year lows, slumped nearly 13 percent to
around $9.77 a share in after market trading.
"That is a disaster. It's really bad. We did not expect an
operating loss this quickly," said Peter Misek, an analyst at
Jefferies & Co.
Mark McKechnie, an analyst at ThinkEquity LLC, put RIM's
value at "about $10 per share" - reflecting what its portfolio
of patents might bring. At its peak in mid-2008, RIM stock
changed hands for more than $140.
Before the warning, analysts had expected RIM's earnings to
f all to 42 cents a share and revenue t o slip to $3.64 billion,
according to analyst views collated by Thomson Reuters I/B/E/S.
RIM is due to release its first-quarter results on June 28.
RIM's acknowledgement of job cuts confirmed reports earlier
this week that a reduction was coming as it repositions itself
in a smartphone market where it now trails far behind Apple Inc
and riv als using Goo gle Inc's Android.
But it gave no figures for the scale of the job cuts or the
likely size of the operating loss. Two sources with close
connections to RIM have to ld Reuters th at RIM, which currently
employs around 16,500 people globally, plans to slash its
workforce closer to 10,000 by early next year.
"They're clearly moving in the wrong direction right now, so
I found it a little frustrating that there wasn't more detail,"
said Alex Gauna, an analyst at JMP Securities.
In a statement, RIM's new CEO, Thorsten Heins, stressed
that he planned to keep spending and hiring for the development
of the next-generation BlackBerry 10 phones and to expand its
catalog of third-party applications. A dearth of apps compared
with the number available for Apple and Android-based devices
has been a major drag on RIM's sales.
RIM, based in Waterloo, Ontario, said it had hired the
bankers from JP Morgan and Royal Bank of Canada,
after releasing its year-end results in late March to aid its
It wants them to evaluate strategies including an overhaul
of its whole business model, as well as less dramatic moves such
as expanding the BlackBerry platform through partnerships and
Other smartphone makers still cannot compete with the
security features on RIM's devices, something that has made the
BlackBerry a crucial tool for police, government and military
"These advisors 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," Heins said.
RIM said its subscriber base grew to 78 million users, up 1
million from the previous quarter ended March 29. But growth was
slower than in any recent quarters.
RIM, its market share falling by the month, is pinning its
hopes on the BlackBerry 10 models, featuring a spiffy new
operating system that RIM says will let it compete more
effectively against Apple and others.
But the new devices won't be released until later this year,
pointing to further difficult quarters to come.
In the meantime, RIM is struggling to retain its top talent.
RIM said on Monday that its chief legal officer was resigning,
and its head of global sales resigned last week to take a job at
audio company Sonos.
"I don't see the tide turning," said Misek. "The problem is
the BlackBerry 10 handsets aren't coming out next quarter, so
you know next quarter is going to most likely be worse. Then you
look at the November quarter, when we'll probably get the BB10
handsets, and at the same time we'll have the iPhone 5. So that
quarter is probably going to be bad.
"So we have a string of bad quarters coming and it really is
tough to see how it's going to get better."
In March, RIM posted a net loss of $125 million on the back
of an inventory writedown for phones launched last year.
Excluding those one-time items, RIM reported an adjusted profit
of $418 million.