Friday, 30 March 2012

RIM's Balsillie resigns amid disappointing results

RIM's Balsillie resigns amid disappointing results Date: Thursday Mar. 29, 2012 9:43 PM ET
Research in Motion co-founder Jim Balsillie announced Thursday he's retiring from the company's board of directors amid disappointing quarterly results and growing uncertainty about the future of the Canadian BlackBerry maker.
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RIM's new CEO and president, Thorsten Heins, told analysts Thursday that the Waterloo, Ont.-based company would consider a sale if an offer came forward, but "it's not the main direction we are pursuing right now."
RIM, once the darling of the technology sector, reported a fourth-quarter loss of US$125 million, or 24 cents per share, compared with a profit of $934 million or $1.78 per diluted share a year ago.
Revenue was $4.2 billion, down 19 per cent, from $5.6 billion for the same period a year earlier.
The most recent quarter included a $355-million writedown on goodwill.
The results contrast analysts' expectations, which predicted the company would earn 81 cents a share and revenue at $4.54 billion.
The company, which earlier this week said it planned to delay its annual presentation to financial analysts, also said on Thursday that it would discontinue providing future financial guidance to analysts.
"The company expects continued pressure on revenue and earnings throughout fiscal 2013. Due to a desire to focus on long term value creation and the current business environment, RIM will no longer provide specific quantitative guidance," it said in a release.
In a conference call with analysts, Heins didn't deny that RIM needs a new approach to compete with Apple's popular iPhone and iPad, as well as devices using Google's Android operating system.
"I did my own reality check on where the entire company really is," Heins said. "It's now very clear to me that substantial change is what RIM needs."
He said RIM will now focus the attention on its core business users.
The company said future headwinds include ongoing weakness in the company's U.S. smartphone business, increasing competitive pressure in the company's international markets and a higher mix of sales coming from entry level products.
It also said it was conducting a "comprehensive review" of opportunities for the company which could include partnerships, joint ventures and licensing.
The company shipped approximately 11.1 million BlackBerry smartphones and more than 500,000 PlayBook tablets during the latest quarter.
RIM took a pounding in 2011 as its share price dropped along with its market share after a series of blunders forced it to fall out of investor favour.
And it disappointed investors even further when it announced that its next generation of smartphones -- the QNX-based BlackBerry 10 -- would not be on the shelves until late 2012.
Earlier this year, Balsillie and co-founder Mike Lazaridis stepped down as co-chief executive officers of the firm and chairmen. Heins, who was recruited by RIM five years ago was named president and CEO.
Balsillie cut ties completely with the company Thursday, also resigning from the board. There was no word on the future of Lazaridis.
"As I complete my retirement from RIM, I'm grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success," Balsillie said in the company's release.
Technology analyst Carmi Levy said he was not surprised that Balsillie opted to leave the beleaguered company.
"Current CEO Thorsten Heins needed to put his stamp on the company and convince investors, developers, consumers (and) businesses that RIM is essentially moving in a different direction," he told CTV News Channel.
"He couldn't have done that if Mr. Balsillie had hung around. He essentially needed to go, and if he didn't volunteer to leave, I suspect that there were voices in the hallway saying ‘we think it's time.'"
Trading of the company's shares were halted ahead of the announcement.

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