The beleaguered BlackBerry handset manufacturer
Research In Motion Ltd.
) posted better than expected second quarter of fiscal 2013
financial results. Both the top and bottom line outpaced the Zacks
Consensus Estimates. In the previous quarter, Research In Motion
added net subscribers and its cash position improves sequentially.
Management maintains its previous guideline that the BlackBerry 10
software-based smartphones will hit the market in the first
calendar quarter of 2013.
The nightmare of Research In Motion continues ever since
) iPhone hit the market. The situation aggravated once
) launched its Android software and several handset manufacturers
adopted that operating system. Although we believe a real
turnaround of Research In Motion will take more time than
previously expected as we remain uncertain when the company will
achieve profitability,the just concluded second-quarter of fiscal
2013 ushered some rays of hope as the market is eagerly waiting for
the company's next-generation Blackberry devices. We, thus,
reaffirm our long-term Neutral recommendation on Research In
Research In Motion has initiated a headcount reduction in order
to optimize its cost structure and has started benefiting from this
restructuring process. The restructuring process will reduce its
headcount by approximately 5,000 (about 30% of its present
workforce) by the end of fiscal 2013. The headcount reduction will
result into $1 billion of yearly cost savings. Furthermore, the
Board of Directors has authorized a share buyback program of up to
5% of the company's outstanding common shares. All these
initiatives may improve the company's bottom line going
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