RIM's Q2 Loss Less Than Expected, Shares Surge7:12 PM EST Thu. Sep. 27, 2012
Research In Motion announced second-quarter results Thursday that are still bleak but slightly better than its first-quarter results, as it presses on in its attempt to stage a comeback against market leaders Apple and Google.
Beating Wall Street's estimates and causing its shares to jump a generous 16 percent, the BlackBerry maker posted a second-quarter revenue of $2.9 billion, up 2 percent from the $2.8 billion it posted in the previous quarter and down 31 percent compared to the second quarter of last year.
RIM said its $2.9 billion in revenue stemmed 60 percent from its hardware business, 35 percent from its services business and 5 percent from its software business.
The Waterloo, Ontario-based company reported a net loss of $235 million, down significantly from the $329 million in net income it reported during the same period last year, but still representing a bright spot compared to the harder-hitting $518 million loss it reported last quarter.
"Implementing large change is very challenging for any company, particularly in an industry that moves at the pace of mobile computing," RIM CEO Thorsten Heins told analysts during a conference call Thursday. "But delivering steady, consistent progress each quarter, while completing our strategic review, is the way we plan to deliver necessary change."
Sales of BlackBerry smartphones dipped quarter-on-quarter, with RIM reporting 7.4 million units sold compared to the 7.8 million that were shipped last quarter. But, Heins pointed to BlackBerry 10, RIM's next-generation mobile operating system, as a way to revive the BlackBerry brand and recapture some of the market share it has lost over the past few years.
"The entire company is energized and excited for the upcoming launch of the first BlackBerry 10 phone, featuring the unique BlackBerry 10 experience," Heins said on the call. "The BlackBerry 10 platform will deliver what we believe is the most seamless and fluid experience in the mobile computing world today."
Heins said BlackBerry 10, set to launch during the first quarter of 2013, will especially attract enterprise users embracing the bring-your-own-device (BYOD) trend. The new operating system includes a number of security features, such as BlackBerry Balance, which allows for the separate hosting of personal data and corporate data on a single device, making it ideal for business use, Heins said.
NEXT: RIM On Track For $1B Cost-Savings
RIM is on track to see $1 billion in cost-savings by the end of its fiscal year, a feat made possible by a series of layoffs that will affect approximately 5,000 employees. RIM began laying off employees in June, and said it expects to complete its reductions by the end of its fiscal year.
"It is difficult for the company to go through some of the decisions we had to make, but these things are essential as the company complete the transition to BlackBerry 10," Heins said. "We are in the midst of building a leaner and stronger organization."
RIM has taken a nose dive in the smartphone market over the past four years, facing increasingly steep competition from Apple and Google. According to Gartner, BlackBerry smartphones accounted for 15.2 percent of the global market during the second quarter of 2008. This year, RIM's market share came to a halt at just 5.2 percent during the second quarter, compared to the 64.1 percent held by Android-based phones and the 18.8 percent held by iOS-based phones.
PUBLISHED SEPT. 27, 2012