With information from The New York Times
OTTAWA — Research in Motion, the beleaguered maker of the BlackBerry smartphone, reported Thursday that its net loss for the latest quarter was $235 million, compared with net income of $329 million in the same quarter a year earlier.
The company said revenue in its fiscal second quarter, which ended Sept. 1, was $2.9 billion, down 31 percent from $4.2 billion a year ago, but up from $2.8 billion in the first quarter.
The net loss narrowed from the first quarter’s $518 million.
“Make no mistake about it, we understand that we have much more work to do,” the chief executive, Thorsten Heins, said in a statement. “But we are making the organizational changes to drive improvements across the company.”
The company’s stock jumped 15 percent in after-hours trading. The earnings were released after the market closed.
“The street is largely giving RIM a pass on this quarter as it readies the important BlackBerry 10 launch,” said Bill Kreher, an analyst at Edward Jones. “The fact of the matter is that the company has really placed on its bets on BlackBerry 10.”
Many analysts had expected nothing but bad financial news for the quarter long before Thursday. And several of them said they were now focused on next year, when RIM has promised to launch its twice-delayed line of BlackBerry 10 phones. The new smartphones will be based on an entirely new, and more sophisticated, operating system.
“I don’t think anything good can come out until they release BB 10, aside from selling the company or something else in the strategic review,” said Peter Misek, an analyst with Jefferies & Company.
But Shaw Wu, an analyst at Sterne Agee, said the dominance of Apple and Androidhas closed the window of opportunity for RIM’s BlackBerry 10 strategy and turned the company’s last great hope into its biggest problem.
“It’s about survival now, it’s not about BlackBerry 10,” said Mr. Wu, who is based in San Francisco. “That’s almost secondary. The battle now is staying alive and looking after your current customers. It’s not really clear that their core customers are looking for BlackBerry 10.”
At a developers conference earlier this week, Mr. Heins, RIM’s chief executive, announced one of the few positive results from the quarter. Some analysts had speculated that growth in RIM’s subscriber base had stalled, or even declined, for the first time in its history. But Mr. Heins told the meeting in San Jose, Calif., that the number of BlackBerry users had grown to 80 million, up from 78 million.
Unlike other smartphone makers, RIM continues to directly profit from every active BlackBerry handset long after its sale. RIM receives monthly subscription fees from carriers for every BlackBerry in exchange for routing the phone’s data through its own, closed network. Under normal conditions, the network allows RIM to provide high security for corporate and government users and it reduces the amount of wireless data consumed by all BlackBerrys.
RIM is not in immediate danger of bankruptcy. The company reported on Thursday that it still holds $2.3 billion billion in cash, an increase of $100 million from with the previous quarter. But Mr. Wu said that costs associated with layoffs at the company as well as its unprofitability are now leading some users, including large corporate customers, to question RIM’s long-term survival. Unless BlackBerry 10 is an exceptional hit, which is far from certain, Mr. Wu said that RIM may be able to continue for only one or two more years.
But there were no signs of retreat from Mr. Heins. Like his predecessors, Jim Balsillie and Mike Lazaridis, he was boldly predicting that BlackBerry 10 will again allow RIM to stand alongside Apple, Google and makers of Android phones as a dominant player that defines the smartphone business.
“BlackBerry 10 introduces a shift to true mobile computing,” Mr. Heins told a RIM-sponsored gathering of software developers on Tuesday. “We are laying the groundwork for a fundamental change in how people communicate, collaborate and engage with each other.”
While physical keyboards remain a significant attraction for many BlackBerry users — a stylized variation of their keys forms the BlackBerry logo — Mr. Wu said he was surprised that RIM continues to emphasize the virtual, touch-screen keyboard on the prototype versions of its upcoming phones. Only after their absence during the prototype’s unveiling in May was widely noted did Mr. Heins confirm that BlackBerry 10s with physical keyboards will be coming. No prototype of those phones has been displayed and Mr. Heins again devoted a great deal of Tuesday’s session to promoting features on the upcoming virtual keyboard.
“It’s not clear to me that fighting the touch-screen battle is the best use of RIM’s resources,” Mr. Wu said. “There are customers that actually like the current BlackBerry the way it is. They should be focused on trying to retain that customer base as much as they can. Then, sure, you can work on your BlackBerry 10 or whatever.”
Estrategia Investimentos S.A.
Estrategia Investimentos S.A.