Ahead of the Bell: Struggling RIM reports for 1Q
TORONTO (AP) — Research In Motion will provide an update on upcoming layoffs and may possibly reveal more details about the new BlackBerry 10 when it releases quarterly financial results after the market closes Thursday.
RIM is facing the most difficult period in its history. The company that fathered the ground-breaking BlackBerry in 1999, is weighing all options with a team of bankers it has hired as its market share is eroded by Apple's iPhone and devices running Google's Android operating software.
On Thursday, RIM will offer an update on its restructuring plan, which includes significant layoffs. The Canadian company is trying to save about $1 billion this year.
Jefferies analyst Peter Misek expects RIM to cut about 6,000 of its roughly 19,500 employees this year.
Even with the launch of the a new operating system for BlackBerry 10, many believe it's too late to reverse RIM's fortunes after the company failed to heed the onslaught of touchscreen phones, like those made by Apple Inc.
And there are concerns that a shift from a physical keyboard on the new phone could alienate its hardcore base, which detest touchscreen technology. So much rides on the success of the new phone, that CEO Thorsten Heins has said the company's turnaround hinges upon it.
Boosted by overseas growth, RIM had 78 million worldwide subscribers as recently as last month, but Misek expects the company to start losing subscribers — two to three million a quarter. He'll be watching Thursday's comments to see how many subscribers RIM has kept.
Analysts polled by FactSet on average expect Research In Motion Ltd. to report a quarterly loss of 3 cents per share on revenue of $3.08 billion. In the same quarter a year ago, RIM earned $695 million, or $1.33 per share, on revenue of $4.9 billion.