TORONTO – Research In Motion beat expectations in its latest financial results as it prepared for the make-or-break launch next year of the BlackBerry 10 smartphones and operating system.
The company reported a profit of $9 million or two cents per share for the three months ended Dec. 1, compared with a profit of $265 million or 51 cents per share a year ago. Revenue totalled $2.73 billion, down from $5.17 billion.
On an adjusted basis, RIM (TSX:RIM) said it lost $114 million or 22 cents per diluted share. Analysts expected a quarterly loss of 32 cents per adjusted share on revenue of $2.6 billion.
The company’s cash position also improved to more than $2.9 billion.
In after hours trading in New York, RIM shares (Nasdaq:RIMM) were up $1.17, or 8.29 per cent, to $15.29.
The launch of the new smartphones will see the Waterloo, Ont., company enter the most important months of its history — ones that will likely determine whether RIM survives in its existing form.
“RIM continued to execute on its product roadmap plans and to deliver on key financial metrics as it gets set for the global launch of BlackBerry 10,” chief executive Thorsten Heins said in a statement.
“More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products, and beta trials of BlackBerry Enterprise Service 10 are underway at more than 120 enterprises including 64 Fortune 500 companies.”
During the quarter, the company shipped 6.9 million BlackBerry smartphones and 255,000 BlackBerry PlayBook tablets, however the company’s subscriber base slipped by 1 million to 79 million from the previous quarter.
“The subscriber decline was a surprise. We thought that emerging market strength would probably help maintain that number, so that fact that it slipped… is meaningful,” said Bill Kreher, a technology analyst with financial services firm Edward Jones.
“The conversation really doesn’t change here. It was a bit of a mixed bag in terms of the results but the company’s future still hinges on this Jan. 30 launch.”
In its outlook, RIM said it expected continued pressure on operating results in the fourth quarter and warned the timing of the BlackBerry 10 launch on Jan. 30 could hurt sales of its current models as customers wait for the new devices.
RIM also said it expected to significantly increase its marketing spending in the fourth quarter and report an operating loss.
With the company heading into uncertain territory in the new year, RIM’s stock price has traded erratically.
Since falling to its lowest level in about a decade in September, the company’s shares have surged about 125 per cent, helped by a number of analyst upgrades.
This year, RIM has watched its market share in North America dramatically fall to about four per cent as the BlackBerry became an afterthought in the face of Apple’s iPhone and the Samsung Galaxy S3.
And while other companies debuted new devices, RIM was forced to push the launch of its BlackBerry 10 operating system and new phones into next year, missing the crucial back-to-school and holiday shopping seasons.
The company has also made significant reductions across its operations, closing facilities, severing ties with certain manufacturers and announcing plans to lay off 5,000 workers across its global operations in an effort to save $1 billion by the end of its fiscal year.