TORONTO (Reuters) - Research In Motion Ltd on Tuesday warned it could report an operating loss and said it had engaged bankers to help it review its business, the latest in a string of dismal messages from the once-dominant BlackBerry maker.
RIM shares, already down more than 75 percent over the past 12 months and trading at 8-year lows, slumped nearly 13 percent to around $9.77 a share in after market trading.
'That is a disaster. It's really bad. We did not expect an operating loss this quickly,' said Peter Misek, an analyst at Jefferies & Co.
Mark McKechnie, an analyst at ThinkEquity LLC, put RIM's value at 'about $10 per share' - for the value of its patents.
RIM, which virtually invented the concept of on-your-hip email with its first BlackBerry devices, is due to release its first-quarter results on June 28.
Analysts had expected RIM to earn 42 cents a share on revenue of $3.64 billion in the quarter, according to analyst views collated by Thomson Reuters I/B/E/S.
RIM also said it would make significant job cuts in some areas, confirming reports of reductions as RIM tries to reposition itself in a smartphone market where it now trails far behind rivals Apple Inc and Google Inc's Android.
But it gave no figures for the scale of the job cuts or the likely size of the operating loss. Two sources with close connections to RIM said last week that RIM, which currently employs around 16,500 people globally, plans to slash its workforce closer to 10,000 by early next year.
RIM, based in Waterloo, Ontario, said it had hired the bankers from JP Morgan and Royal Bank of Canada, after releasing its year-end results in late March to aid its strategic review.
It wants the bankers to evaluate strategies including an overhaul of its whole business model, as well as less dramatic moves such as expanding the BlackBerry platform through partnerships and licensing deals.
Other smartphone makers can still not compete with the security features on RIM's devices, something that has made the BlackBerry a crucial tool for police, government and military use.
'These advisors have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies,' CEO Thorsten Heins said in a statement.
BLACKBERRY 10
RIM, its market share falling by the month, is pinning its hopes on its next-generation BlackBerry 10 models, which will use a spiffy new operating system that RIM says will let it compete more effectively against Apple and others.
But the new devices won't be released until later this year, pointing to further difficult quarters to come.
'I don't see the tide turning,' said Misek. 'The problem is the BlackBerry 10 handsets aren't coming out next quarter, so you know next quarter is going to most likely be worst. Then you look at the November quarter, when we'll probably get the BB10 handsets, and at the same time we'll have the iPhone 5. So that quarter is probably going to be bad.
'So we have a string of bad quarters coming and it really is tough to see how it's going to get better.'
In March, RIM posted a net loss of $125 million on the back of an inventory writedown for phones launched last year. Excluding those one-off items, RIM reported an adjusted profit of $418 million.
(Writing by Cameron French; Editing by Janet Guttsman and Frank McGurty)
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