RIM Beats Q3 Expectations, CEO Says It's Staging A Comeback7:09 PM EST Thu. Dec. 20, 2012
Research In Motion is gaining momentum with the launch of its new BlackBerry 10 platform just weeks away, reporting Thursday third-quarter earnings that were still bleak but enough to beat analysts' expectations.
RIM, which also announced the retirement of CIO Robin Bienfait, reported third-quarter revenue of $2.7 billion, down 47 percent compared to the $5.2 billion in revenue it reported for the same period last year.
The Waterloo, Ontario-based company also reported net income of $9 million, down significantly from the $265 million it reported during the third quarter of last year, but representing a return to profitability after several quarters of losses.
RIM's BlackBerry sales for the quarter were 6.9 million, down from the 7.4 million it shipped in the second quarter. The company's BlackBerry subscriber base also dipped quarter-on-quarter, from 80 million users in the second quarter to 79 million users in the third quarter.
RIM's shares surged 8.4 percent to $15.31 in after-hours trading after its earnings were released.
RIM CEO Thorsten Heins said the company's third-quarter numbers suggest it's staging a comeback in the mobile market and pointed to the Jan. 30 launch of BlackBerry 10, its next-generation mobile operating system, as a future source of growth.
"[Our third-quarter] results continue to reflect the successful transition the company is making as it moves toward the launch event for our BlackBerry 10 mobile computing platform on Jan. 30," Heins told analysts during a conference call Thursday announcing the results.
RIM is banking heavily on BlackBerry 10 to revive its fortunes and help it recapture some of the market share it's lost to smartphone leaders Apple and Google over the past few years. According to research firm Gartner, the BlackBerry platform in the third quarter of 2012 accounted for 5.3 percent of the global smartphone market, compared to the 72.4 percent held by Google's Android OS and the 13.9 percent held by Apple's iOS.
Heins said carrier and developer feedback on BlackBerry 10 has been "exceptional." In addition to delivering new features such as BlackBerry Hub, a central console from which users can manage all notifications, emails and other items, BlackBerry 10 will usher in a new generation of BlackBerry smartphones, including those with RIM's signature QWERTY keyboard and those that have touch screens.
Heins also said RIM is "nearing the end" of the headcount reductions it's dealt out this year to cut back on operational costs. He said the company already has gleaned the $1 billion in savings it set out to meet in June, when it first announced its plans to slash 5,000 jobs from its global workforce.
"Our teams are executing very well and meeting their commitments during a period that has involved hard work, long hours, and very difficult decisions associated with headcount reductions," Heins said.
Heins said RIM will place a new emphasis on services moving forward to help offset the blow its hardware business has taken over the past few quarters. In particular, RIM will focus on growing its portfolio of enterprise-specific services, such as mobile device and application management solutions.
RIM no longer provides formal financial outlooks but cautioned that the growth it expects from BlackBerry 10 won't happen overnight and said its fourth-quarter earnings will likely still be grim.
"We are realistic about our competitors and the great devices in our industry," Heins said on the call. "But we know that customers in this industry demand and respond to innovation, and we believe BlackBerry 10 truly delivers on this request."
PUBLISHED DEC. 20, 2012