BlackBerry maker Research in Motion offered up a grim quarterly report today showing deepening losses and worsening sales, as it announced 5,000 job cuts and a delay in its new smartphone platform.
The struggling Canadian firm said its loss in the quarter ending June 2 widened to US$518 million. It delayed until early 2013 a new platform to help BlackBerry compete with Apple and other smartphone makers.
The report was worse than expected and sent RIM shares, already at a nine-year low, tumbling nearly 18 percent in after-hours trade to $7.44.
The company, which has been hammered in the rapidly changing market now dominated by makers of devices using Google's Android software and Apple's iPhone, said it would cut jobs to boost efficiency and save $1 billion in operating costs.
The move includes "a global workforce reduction of approximately 5,000 employees, which is expected to be completed by the end of fiscal 2013."
To make matters worse, the company said it was delaying its new BlackBerry 10 platform, which had been expected later this year in an effort to drive sales in the key holiday season.
The new platform is widely seen as the last chance for BlackBerry to regain traction in the marketplace.
"The successful launch of the BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the company's number one priority," a statement said.
But the development "has proven to be more time consuming than anticipated" and the new system launch was put off until the first quarter of 2013, it added.
"RIM's development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready," said Thorsten Heins, who took over earlier this year as president and chief executive.
"I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience."
The company expects to incur restructuring related charges of $350 million by the end of fiscal 2013.
The figures for RIM's first fiscal quarter were dismal, highlighting its weakening position.
Revenues of $2.8 billion were down a whopping 33 percent from the prior quarter, and off 42 percent from a year earlier.
The company shipped 7.8 million BlackBerry phones in the quarter, down from 11.1 million in the prior quarter, and 260,000 tablets -- a drop of almost half.
The net loss of $518 million widened from the $125 million loss in the prior quarter and compared with a profit of $695 million a year ago.
Independent analyst Jeff Kagan said the report was "full of bad news."
"The numbers were bad. Worse than we hoped. And their next generation device which was expected this fall now won't be available until next year," Kagan said.
"Can RIM recover is the question we are now asking. They still have customers who love them, but they are simply losing business too quickly."
A survey by the research firm IDC showed smartphones powered by Google's Android software accounted for 59 percent of the global market in the first quarter of 2012, with 23 percent for Apple's iPhones.
That left just 6.4 percent for BlackBerry, compared with 13.6 percent a year ago.
In the US market, only around five percent of smartphone buyers opted for BlackBerry in the past three months, according to a Nielsen survey.