Until recently, the most significant thing expected to happen at the annual shareholders’ meeting of Research In Motion Ltd. was a name change.
Now, the gathering in Waterloo, Ont., on Tuesday morning is likely to be dominated by questions about RIM’s disappointing fiscal first-quarter results.
Announced late last month, RIM’s first-quarter numbers, which included an adjusted loss of $67-million (U.S.), or 13 cents per diluted share, fell far short of analyst expectations.
RIM’s share price dropped almost 28 per cent the day the earnings came out, leading to a number of grim analyst reports – some predicting the end of RIM's existence as a standalone company.
Investors will likely press chief executive officer Thorsten Heins for a reaction. This will be the first annual meeting covering a year under Mr. Heins, who had only been on the job for a few months at the time of last year’s meeting.
In a significant milestone for the company, shareholders will be asked to formally vote on changing the corporate name from Research In Motion to BlackBerry. RIM has been using the new name for months, but it has yet to be officially approved by shareholders. However, that measure, which is expected to pass easily, will now likely be overshadowed by difficult questions from investors.
Mr. Heins will probably be asked about the extent to which RIM's newest line of BlackBerrys is convincing users to make the switch from competing devices made by the likes of Apple and Samsung – or even from older BlackBerry units.
Some investors will also likely want to know more about RIM's strategy for the low end of the smartphone market. Both the Z10 and Q10 BlackBerrys, released earlier this year, are premium handsets. The Q5, released only last month in certain overseas markets, is the first mid-tier BlackBerry 10 device, but there is no word yet from the company on when or if the phone will be released in Canada or the U.S.
Investors' questions are made urgent by the company's declining share price and by RIM’s decision to limit the amount of information it offers during its quarterly earnings announcements.
Previously, RIM stopped offering specific guidance on upcoming quarters, saying the smartphone industry had become too difficult to predict. In its most recent quarter, the company also refused to formally disclose how many of its shipments were of the new BlackBerry 10 phones, although Mr. Heins mentioned on a conference call that only 2.7-million of the 6.8-million phones shipped that quarter were from the new product line – almost a million fewer than some analysts expected.
Despite the lacklustre first-quarter results, Mr. Heins can point to a number of achievements, including the release of the BlackBerry 10 phones, which had been the subject of numerous delays.
Indeed, one year ago, RIM's share price hovered around a multi-year low of less than $7, but by the start of 2013, shares were trading at more than $17.50, and optimism about the company's new devices was running high.
On Friday, RIM shares ended trading on the NASDAQ at $9.55.