RIM faces $1bn writedown from unsold BlackBerrys
The gloom at Blackberry maker Research in Motion has deepened with the company predicting a first quarter operating loss that has sparked a far-reaching external review by hired bankers.
According to analysis from Bloomberg, the company is also facing a $1bn writedown after slumping sales saw its in-house inventory climb by 18% in the last quarter.
Unsold units now stand at more than $1bn, which doesn’t include stock languishing with carriers and retail resellers.
With jobs losses already expected – with as many as 6,000 of the company’s 16,500 workforce facing cuts – the company predicted an unspecified Q1 operating loss that shocked investors.
“That is a disaster. It’s really bad. We did not expect an operating loss this quickly,” said Peter Misek, an analyst at Jefferies and Company.
RIM confirmed the upcoming job losses, but gave few details on the scale or timing of the cuts, which further disappointed analysts.
That is a disaster. It’s really bad. We did not expect an operating loss this quickly
“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.
RIM’s shares, down more than 75% over the past 12 months and trading at eight-year lows, slumped nearly 13% to around $9.77 a share in after-market trading.
RIM is also struggling to retain its top talent after a series of high-level executive departures in recent weeks. RIM said this week that its chief legal officer was resigning and its head of global sales quit last week to take a job at audio company Sonos.
RIM has hired bankers from JP Morgan Securities and RBC Capital Markets to help the company evaluate its strategies, including a possible overhaul of its business model.