RIM's big loss not as bad as feared
September 29, 2012, 12:01 am TWN
TORONTO -- BlackBerry-maker Research In Motion (RIM) has posted another large quarterly loss, but the hemorrhaging was not as bad expected.
The Canadian company is still losing market share in North America, where it struggles to compete with Apple's iPhone and phones that run Google's Android software. But it has stepped up sales in developing markets and actually increased its subscriber base and cash position.
RIM's stock surged more than 20 percent Thursday in after-market trading on the news.
The company reported Thursday that it lost US$235 million, or 45 U.S. cents a share, in its fiscal second quarter, which ended Sept 1. That compares with a profit of US$419 million, or 80 cents per share, a year ago.
RIM reported revenue of US$2.9 billion. Analysts polled by FactSet expected a loss of 47 cents on revenue of US$2.49 billion.
RIM said it shipped 7.4 million BlackBerry smartphones in the quarter, down from 10.6 million in the same period last year. Some analysts predicted RIM would ship only 6.4 million devices as the company prepares to launch much-delayed new BlackBerrys that have been deemed critical to its survival.
RIM pioneered the smartphone in 1999 but North American consumers have been abandoning BlackBerrys for flashier, touch-screen phones in recent years. RIM is banking its future on its much-delayed BlackBerry 10 platform, which is meant to offer the multimedia, Internet browsing and apps experience that users now demand.
Chief Executive Thorsten Heins said on a conference call with analysts that BlackBerry 10 is still on track to be released in the first quarter of 2013 — several months after the release of Apple's iPhone 5, which came out earlier this month. Heins said competitors have released strong products recently but vowed BlackBerry 10 “will advance the operating system environment to a whole new level.”
Heins replaced co-CEOs Jim Balsillie and Mike Lazaridis in January after the company lost tens of billions in market value. He surprised many this week when he said at a conference for mobile applications developers that RIM has 80 million subscribers, up from 78 million in early June. Many analysts had expected RIM to start losing subscribers in the second quarter.
The results show that RIM is making progress as it transitions to its next generation of BlackBerry smartphones and completes its cost reduction plan, Heins said.