Why Research In Motion Shares Tanked
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What: Shares of Research In Motion (NAS: RIMM) have tanked today by as much as 20%, to nine-year lows after the company posted a dismal first-quarter earnings release.
So what: Revenue shrank by 43% to $2.8 billion, resulting in a net loss of $518 million, or $0.99 per share. Software and service combined now comprise 41% of sales, but that's mostly due to plunging hardware sales. RIM shipped 7.8 million BlackBerrys and 260,000 PlayBooks during the quarter, far less than a year ago.
Now what: As part of its restructuring efforts, the company is laying off 5,000 employees to help it reduce $1 billion in annual costs. As if it couldn't get any worse, the kicker is that BlackBerry 10 is delayed again, until the first quarter of 2013, with the company simply saying that development "has proven to be more time consuming than anticipated." Next quarter is also expected to see an operating loss.
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The article Why Research In Motion Shares Tanked originally appeared on Fool.com.Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.