RIM ships 7.4M BlackBerrys, earnings please Wall Street
BlackBerry maker Research In Motion (NASDAQ:RIMM) announced better-than-expected financials, sending the company's stock up slightly in after-hours trading immediately following the release of its quarterly report.
The company also said it shipped 7.4 million BlackBerry smartphones in its fiscal second quarter and 130,000 BlackBerry PlayBook tablets. The figures were down sharply from a year ago when it shipped 13.2 million smartphones and 500,000 PlayBooks, as well as down from the fiscal first quarter when it had 7.8 million smartphone and 260,000 PlayBook shipments.
RIM CEO Thorsten Heins noted on the company's earnings conference call that "the entire company is energized and excited" for the launch of BlackBerry 10 in the first quarter of 2013. He said he and other RIM executives have met with dozens of carriers in 16 countries to sell them on BB10. He said RIM's teams are working "night and day" to meet the expectations RIM and its customers have for the new platform.
Heins said that as part of the company's strategic review he has been meeting with many unnamed organizations to talk about potential partnership and licensing opportunities of BB10 and other BlackBerry technologies. Heins did not provide any details on the timeline for completion of the process but that RIM's board is taking the review seriously.
The company's results are notable considering the black cloud that continues to hang over RIM. The company has suffered from anemic sales in North America and Europe (though it has enjoyed modest success in markets in Asian, the Middle East and elsewhere) and it recently delayed the release of its revamped BlackBerry 10 operating system until the first quarter of next year. RIM is counting on its BB10 platform to rekindle interest in BlackBerry products, though investors worry that the Canadian smartphone vendor won't be able to compete against the likes of Apple's (NASDAQ:AAPL) iPhone, Google's (NASDAQ:GOOG) Android smartphones and Microsoft (NASDAQ:MSFT) Windows Phone 8 gadgets.
As for its financials, RIM reported revenue for the second quarter of $2.9 billion, up 2 percent from the previous quarter but down 31 percent from the same quarter last year. Sales outside of the United States, the United Kingdom and Canada made up 58 percent of revenue in the quarter. RIM's net loss for the quarter was $235 million, down from $329 million than in the year-ago period. The net loss and drop in revenue were less than some investors had feared, and the situation sent RIM's shares up around 2 percent in after-hours trading to $7.14.
"Encouraging financial results from RIM--looks like they can tread water until BlackBerry 10 next year," Tweeted Current Analysis analyst Avi Greengart.
Looking ahead, RIM said it expects continued pressure due to "the increasing competitive environment, lower handset volumes, increased marketing expense associated with the launch of BlackBerry 10, and some impact from pressure by customers to reduce RIM's monthly infrastructure access fees." RIM said it also plans to continue to invest in targeted marketing and sales programs--likely including price cuts--to push sales of legacy BlackBerry 7 handheld devices before BB10 launches.
The company said it expects to report an operating loss in its fiscal third quarter as it completes its cost cutting program. The program is designed to save RIM $1 billion in the current fiscal year. As part of the program, RIM plans to cut 5,000 jobs.
During RIM's Blackberry Jam Americas developer conference earlier this week in San Jose, Calif., Heins and other RIM executives showed off a few of RIM's BlackBerry 10 features. The platform will offer BlackBerry Flow, which allows users to scroll seamlessly between apps; BlackBerry Peek, which allows users to glance at another application without leaving the one a user is currently running; and BlackBerry Hub, which combines various notifications and messages into one inbox.
And as part of the company's efforts to bolster its BlackBerry 10 ecosystem, RIM said Facebook, Twitter and other popular social networking apps have promised to build BlackBerry 10 apps.
Earlier this week RIM's marketing chief Frank Boulben gave Bloomberg some hints about how RIM will roll out BB10. He said the company will conduct a "progressive reveal" of the platform to business executives and technology press before a splashy launch event early next year. RIM plans to offer a handful of BB10 models with both touchscreens and Qwerty keyboards, and Boulben said RIM expects to be selling BB10 phones in roughly two dozen markets by the end of the first quarter. He said some carriers will begin testing the phones next month, though he didn't provide specifics.
In other RIM news, CrackBerry posted what it said are pictures of RIM's planned BlackBerry 10 phones, the L Series and N series devices. One gadget sports a Qwerty keyboard and the other is a full touchscreen device.
Phil Goldstein contributed to this report.