Why Research In Motion Shares Tanked
Jun 29th 2012 1:31PM
Updated Jun 29th 2012 1:36PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Research In Motion (NAS: RIMM) have tanked today by as much as 20%, to nine-year lows after the company posted a dismal first-quarter earnings release.
So what: Revenue shrank by 43% to $2.8 billion, resulting in a net loss of $518 million, or $0.99 per share. Software and service combined now comprise 41% of sales, but that's mostly due to plunging hardware sales. RIM shipped 7.8 million BlackBerrys and 260,000 PlayBooks during the quarter, far less than a year ago.
Now what: As part of its restructuring efforts, the company is laying off 5,000 employees to help it reduce $1 billion in annual costs. As if it couldn't get any worse, the kicker is that BlackBerry 10 is delayed again, until the first quarter of 2013, with the company simply saying that development "has proven to be more time consuming than anticipated." Next quarter is also expected to see an operating loss.
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The article Why Research In Motion Shares Tanked originally appeared on Fool.com.Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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