The BlackBerry maker's loss was much larger than expected. New software won't arrive until 2013.
TORONTO - Struggling BlackBerry maker Research In Motion Ltd. revealed Thursday that its business is crumbling faster than thought.
The Canadian company posted worse results for its latest quarter than analysts had expected. It's cutting 5,000 jobs and delaying the launch of its new phone operating system, BlackBerry 10, until after the holiday shopping season.
After several delays, the first phone with BlackBerry 10 was expected later this year. It will be delayed even longer, to the first quarter of next year, RIM CEO Thorsten Heins said.
The delay comes as North Americans are abandoning BlackBerrys for iPhones and Android phones. Analysts have long said the new BlackBerries will come out too late to reverse RIM's fortunes. RIM was pinning its hope on the new BlackBerry 10 system, which is meant to offer the multimedia, Internet browsing and apps experience that customers now demand.
Now it will come out months after a new iPhone is expected to be released. Current and previous iPhones have made the BlackBerry look ancient.
The job cuts are part of a previously announced initiative to cut $1 billion in annual costs this year. They represent about 30 percent of RIM's workforce, which is currently at 16,500.
"It is necessary to change the scale and refocus the company," Heins said on a conference call with analysts.
"I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn't move forward with a change of this size if we didn't think it was critical for our future."
RIM shares plunged $1.38, or 15 percent, to $7.75 in extended trading, after the release of the results. If they hold that level into regular trading Friday, they will set a new nine-year low.
Heins acknowledged that he delivered "a lot of tough news."
"This was a challenging quarter for the company on many fronts," he said. "And I am not satisfied with the financial performance we are reporting today."
Heins had previously vowed to do everything he could to release BlackBerry 10 this year, but he said Thursday that the timetable simply wasn't realistic.
"I will not deliver a product to the market that is not ready to meet the needs of our customers," he said. "There will be no compromise on this issue."
RIM lost $518 million, or 99 cents a share, in its fiscal first quarter, which ended June 2. This compared with a profit of $695 million, or $1.33 per share, a year ago.
Excluding impairment charges, the latest loss was 37 cents per share. Analysts polled by FactSet were expecting a loss of 3 cents.
Revenue fell 43 percent to $2.8 billion, well below analyst expectations of $3.1 billion.
RIM said it shipped just 7.8 million BlackBerry smartphones in the quarter, down 41 percent from a year earlier.