Shares of Research In Motion rose nearly 3% in early trading Friday, as investors reacted to the BlackBerry maker’s revised business plan.
Stock of the Waterloo, Ont.-based company were up 41 cents to $14.10 on the Toronto Stock Exchange shortly after the market opened.
New CEO Thorstein Heins told investors late Thursday that it will shift more attention on its business users, and stop pursuing the consumer market as aggressively as it has been in recent quarters.
The change of direction came as the company posted a loss of US$125-million in the most recent quarter. RIM, which had been expected to show a profit when it reported after the markets closed on Thursday, attributed the weaker results primarily to a $355-million asset writedown – reflecting the reduced value of its business.
The loss equalled 24 cents US per share compared with a profit of US$934 million or $1.78 per diluted share a year ago. Excluding one-time charges, RIM reported an adjusted profit of $418 million or 80 cents per share.
Revenue fell to $4.2 billion, down from $5.6 billion a year earlier.
Analysts had expected the company to ship 11.5 million BlackBerrys in the quarter but it reported only about 11.1 million were sold.
Heins, who has been steering the company since January, said Thursday “it’s now very clear to me that substantial change is what RIM needs.”
He said Research In Motion now will put more attention on its core business users: “We plan to refocus on the enterprise business and capitalize on our leading position in this segment.”
National Bank Financial analyst Kris Thompson said RIM is going back to its roots, but that it could be a risky move.
“Our view is that RIM is once again focusing on its enterprise roots, which is not the fastest growing market,” Thompson wrote in a research note.
U.S.-based analyst Anil Doradla of William Blair & Co. said after 10 weeks as CEO, Heins has changed his tone in terms of strategic direction and is looking to the company’s strength in the business market.
“In terms of strategy, while marketing and execution remain focus areas, the company appears poised to double down on its enterprise offering, while exiting or pursuing partnerships to address the consumer market,” Doradla wrote in a research note.
Jim Balsillie, 52, also announced his retirement on Thursday. Balsillie had remained a director since losing his job as co-chief executive and co-chairman of the company in January. Balsillie was, for many years, the main spokesman for the company as it grew from a small niche technology maker into a global leader in smartphone. He had shared the CEO and chairman roles with RIM co-founder Mike Lazaridis.
