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Research in Motion Profits Plunge as Revenues Halved

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Canada's Research in Motion has reported that its third quarter revenue nearly halved to USD2.7 billion, down 47% from $5.2 billion in the same quarter of 2012. The revenue breakdown for the quarter was approximately 60% for hardware, 36% for service and 4% for software and other revenue.

Net profit plunged to just USD14 million, compared to a profit of US$265 million a year ago.

During the quarter, RIM shipped approximately 6.9 million BlackBerry smartphones, a sharp fall on the 7.9 million in the previous three months. RIM also shipped approximately 255,000 BlackBerry PlayBook tablets, which was ahead of already weak expectations.

"RIM continued to execute on its product roadmap plans and to deliver on key financial metrics as it gets set for the global launch of BlackBerry 10," said Thorsten Heins, President and CEO. "During the third quarter, we continued to demonstrate our strong financial position, generating $950 million in cash flow from operations, and increasing our cash position significantly to more than $2.9 billion."

Looking ahead, the company expects that there will be continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter.

The company expects to post a loss in its fourth-quarter as it is hit by the double-whammy of higher marketing costs for the BlackBerry 10 platform, and lower sales of its older products as customers delay upgrades.

RIM also announced today that Robin Bienfait, Chief Information Officer for RIM has made the decision to retire at the end of this year following 6 years of service to the company.

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Tags: research in motion  Canada