If you were looking for signs of a turnaround in BlackBerry market share through the production chain, you'll unfortunately have to keep looking. One of RIM's manufacturers, Celestica, is planning to phase out its production for the smartphone maker through the next three to six months. The contractor is expecting a relatively small cost of no more than $35 million US. Despite the apparent hit, the departure isn't necessarily a sign of mounting trouble for Waterloo: RIM already said that it wanted to streamline its processes to save money, and consolidating its production efforts certainly fits the bill. We'd expect any bounce back in manufacturing levels to come nearer to the BlackBerry 10 launch, when the company hopes to widen its audience once again.
Celestica to wind down manufacturing services for Research in Motion
TORONTO, June 18, 2012 /PRNewswire via COMTEX/ -- (All amounts in U.S. dollars. Per share information based on diluted shares outstanding unless noted otherwise).
Celestica Inc. (NYSE, TSX: CLS), a global leader in the delivery of end-to-end product lifecycle solutions, today announced that over the course of the next three to six months, it will wind down its manufacturing services for Research in Motion (RIM).
Celestica has been a high-performing manufacturing supplier for RIM and will work closely with RIM throughout the transition. As discussed on the company's first quarter results conference call on April 24, Celestica has been working with RIM as it assesses its supply chain strategy. Celestica estimates that prior to any recoveries, its restructuring charges will not exceed $35 million.
More details about this announcement will be provided as part of the company's second-quarter results press release and conference call, which are scheduled for Friday, July 27.
In addition, Celestica is reaffirming its second quarter financial guidance that was provided on April 24. The company anticipates revenue to be in the range of $1.65 billion to $1.75 billion, and adjusted net earnings per share to be in the range of $0.20 to $0.26.