RIM Reports Loss but Beats Expectations; Shares Jump
Research In Motion reported quarterly results that beat analysts' expectations, but the struggling company still reported a net loss on Thursday.
Shortly before the release, the company's shares were halted. Shares rose more than 5 percent once they began trading again after the bell. (Click here to track the latest quotes for RIM.)
The company reported net income of $9 million, or 2 cents a share. That compared with a year-ago profit of $265 million, or 51 cents.
Excluding one-time items related to restructuring and other issues, the company posted a third-quarter net loss of $114 million, or 22 cents per share, sharply lower than the $1.27 a share in earnings it reported a year ago.
Revenue plunged 48 percent to $2.7 billion from $5.22 billion in the year-earlier period.
However, the results beat expectations: Analysts had expected the company to report a quarterly loss excluding items of 35 cents a share on $2.66 billion in revenue, according to a consensus estimate from Thomson Reuters.
"What's more encouraging here is the loss is appreciably less than people had expected. So it indicated that the company has been effective in limiting expenses and trying to conserve cash," said David Garrity, GVA Research, on CNBC's "Closing Bell."
On the conference call following the release, CEO Thorsten Heins said consumers will be able to purchase BlackBerry 10 phones shortly after the device's launch event on January 30. He added that the company's "cash flow increased significantly" and called it an "excellent quarter" for the company.
During the previous quarter, BlackBerry laid off about 2,000 workers and said it planned on laying off more in the third quarter.
"We are now nearing the end of our headcount reductions," Heins said on the call.
The company recorded its first-ever drop in its subscriber base barely a month before the crucial launch of the new BlackBerry 10 smartphone line. The company said its subscriber base in the quarter fell to about 79 million from about 80 million in the period ended Sept. 1.
RIM has struggled to maintain its market share amid increased competition from smartphones that run on Google's Android software and Apple's iPhone. The decline in RIM's existing business and cash in recent years makes the release of the new BlackBerry 10 platform that is planned for early next year critical to the company's survival.
The company said it expects to report an operating loss in the current quarter and plans to significantly increase its marketing spending.
"The outlook is still sort of tough. I'll be very interested to see what the stock will do, because we've had that nice run," said Colin Gillis, an analyst at BGC Partners. "Will people be looking to take a little profit because the hard work is still ahead?"