RIM profitability comes under pressure

Research In Motion (RIM) reported that its first fiscal quarter to May 28, 2011 revenue rose by 16 per cent to US$4.9 billion compared to US$4.2 billion a year ago, but net profit dropped by 10 per cent to US$695 million, down from US$769 million a year ago.

The revenue breakdown for the quarter was approximately 78 per cent for hardware revenue, 20 per cent for service and two per cent for software and other revenue.

During the quarter, RIM shipped approximately 13.2 million BlackBerry handheld devices and approximately 500,000 BlackBerry Playbook tablets.

“Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter,” said Jim Balsillie, co-CEO of RIM.

The company also announced its intention to cut jobs in order to lower its operating costs, but is still planning the details so was unable to say how many redundancies would occur.