Research in Motion Hires Bankers; Looks to Pursue "Strategic Options"

Research in Motion RIMM, the beaten down smartphone maker, announced on Tuesday that it has hired JP Morgan JPM and RBC Capital Markets "to assist the Company and our Board of Directors in reviewing RIM's business and financial performance." In the press release, the company stated that "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, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives." The stock was halted prior to the announcement. In addition to disclosing the hiring of bankers, the company said that its financial performance will continue to be challenging over the next few quarters and that it expects to report a first-quarter operating loss. Analysts are currently projecting that Research in Motion would report a first-quarter profit of $0.41 per share. "The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter." Research in Motion also highlighted two recent hires, Kristian Tear, Chief Operating Officer, and Frank Boulben, Chief Marketing Officer. The company's CEO, Thorsten Heins, wrote, "both will assist me and the existing executive team as we continue to make the organizational changes necessary to position RIM for the future and prepare for the launch of our new BlackBerry 10 platform." Despite the new hires, Research in Motion continues to anticipate that headcount will be cut in some areas "throughout the remainder of the fiscal year" as part of the company's CORE (cost optimization and resource efficiency) program. The CORE program is targeting $1 billion in savings by the end of fiscal 2013, based on the company's Q4 run rate, according to the press release. "We are targeting better efficiency and use of resources in our sales and marketing initiatives to effectively leverage marketing windows and evaluate our country portfolio to determine where it makes sense for us to prioritize our efforts. We will also continue to review RIM's organizational structure and clearly define accountabilities for all key businesses and business processes with a goal of eliminating fragmentation, duplication and inefficiencies. While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community." Upon re-opening for trade in Tuesday's after hours session, RIMM shares are trading down more than 10% to $10.02.