RIM: The End of a Rocky Road
NEW YORK (TheStreet) -- Research In Motion's(RIMM) fiscal first-quarter was eye opening, not just because of the company's turgid bottom line, but because of how fast its losses are accelerating. This may be the end of the line for the Canadian firm, according to several analysts.
The handset maker reported a much wider than anticipated loss for its fiscal first quarter, pushed back the launch of the BlackBerry 10 until the first calendar quarter of 2013 and announced plans to lay off 5,000 employees, roughly 30% of its workforce.
The company had essentially been betting its fortunes on the BlackBerry 10 platform, so to push it back past the holiday selling season doesn't inspire confidence, says Barclays Capital analyst Jeff Kvaal.
"We believe further delays are possible given RIM's history (the first QNX phones were initially expected in 2H11). The company expects to report another operating loss in F2Q. We expect operating losses to extend well into FY14," Kvaal wrote in his research report. He rates shares "neutral," but lowered his price target to $6 from $8.