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RIM posts major quarterly loss, Jim Balsillie resigns from board
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The Canadian Press
Jim Balsillie, the brash, hockey-loving executive who helped build Research in Motion (TSX:RIM.TO - News) into a global force with the BlackBerry smartphones, is retiring from the struggling technology company as its new CEO considers options that could include putting RIM up for sale — although that's not the priority.
The announcement, symbolic of the changes afoot at RIM, came along with a financial report that fell short of analysts' already low expectations on Thursday. The company announced a loss, rather than the reduced profit that many had expected, and fewer BlackBerrys were sold than anticipated.
While Balsillie's retirement from RIM's board of directors at age 52 will have little real impact on the company — he and company founder Mike Lazaridis had were replaced as co-chief executive and co-chairman in January — his departure is another indication that Canada's premier technology company is in trouble.
Thorstein Heins, who has the job of steering the company as its new chief executive and president, told analysts Thursday that RIM's management and board would consider a sale if an offer came forward but added "it's not the main direction we are pursuing right now."
He didn't deny what many outside observers have been saying for months — that RIM needs a new approach in a world where Apple's iPhone, iPad and devices using Google's Android operating system are winning market share, especially among consumers.
"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 Research In Motion now will put more attention on its core business users: "We plan to refocus on the enterprise business and capitalize on our leading position in this segment."
Balsillie had become one of Canada's best-known businessman both because of his role at the company, but also because of his failed attempts to use his personal fortune from his part ownership of RIM to bring another National Hockey League team to southern Ontario.
He often frustrated analysts who cover RIM, who privately griped about Balsillie "overpromising and underdelivering" and just talking too much. Some of Balsillie's favourite expressions on conference calls were: "Just you wait and see. Just wait until you see our roadmap. It's very exciting."
He issued a brief comment in RIM's announcement.
"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.
Heins said RIM won't release its BlackBerry 10 smartphones — the next-generation of BlackBerry smartphones with a new operating system based on the system in PlayBook tablet computer — until later this year.
Research In Motion announced from its headquarters in Waterloo, Ont., that it had a loss in the final quarter of its 2012 financial year, rather than the profit that had been expected, as a result of writing down some of its assets.
Sales of the BlackBerry were also below many analysts expectations and the company, which usually provides guidance about where it expects revenue and profit will be in the near future, said it's not continuing that practice.
Heins also said the BlackBerry maker can't excel in every field, noting the consumer market.
"We believe that BlackBerry cannot succeed if we try to be everybody's darling and all things to all people. We will seek strong partnerships to deliver those consumer features and content that are not central to the BlackBerry value proposition, for example, media consumption applications."
RIM, known for its technical strengths, produces its own hardware, software, operating system and applications such as the BlackBerry Messenger Service, a popular instant messaging service that is exclusive to BlackBerry users.
While this has been an advantage for RIM in the past, the company has seen software developers choose to focus on applications for more popular iPhones and Androids.
The company said two of its senior executives are out. Chief technology officer for software David Yach will be retiring and RIM's chief of global operations, Jim Rowan, is leaving "to pursue other interests."
Heins also said his message was simple: "We're making the necessary changes at the company."
In its financial results, RIM reported a loss for its latest quarter of US$125 million or 24 cents per share as it took a $355-million charge to goodwill.
The loss compared with a profit of $934 million or $1.78 per diluted share a year ago. Revenue fell to $4.2 billion, down from $5.6 billion.
During the quarter, RIM shipped approximately 11.1 million BlackBerry smartphones and over 500,000 PlayBook tablets.
Excluding one-time times, RIM reported an adjusted profit of $418 million or 80 cents per share.
The average analyst estimate had been for a profit of 81 cents per share and revenue of $4.54 billion, according to estimates compiled by Thomson Reuters.
Analysts had expected the company to ship 11.5 million BlackBerrys in the quarter.
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