Revenue fell 31 percent to $2.87 billion in the period, which ended Sept. 1, topping a projection of $2.47 billion.
While sales of the BlackBerry’s phone beat the 6.9 million predicted by analysts, they remain a fraction of Apple’s volume. The latest iPhone, released earlier this month, sold 5 million units in a single weekend.
RIM’s subscriber base climbed to 80 million at the end of last quarter, up from 78 million. Still, the new BlackBerry 10 lineup has been delayed at least a year, making it harder for the company to compete with the latest Apple and Android devices. At RIM’s software developer conference this week in San Jose, California, Heins said the debut of BB10 is “a few short months away,” without being more specific.
The delays mean the BlackBerry 10 will miss the holiday season, when new Android devices and phones built on Microsoft Corp.’s Windows 8 software will hit the market.
RIM’s share of the global smartphone market dropped to 4.8 percent in the second calendar quarter, from 12 percent a year earlier, according to research firm IDC. Still, Heins said this week that BB10 will have a “clear shot” at being the world’s third-largest mobile operating system. That would put it behind Android and Apple’s iOS, and ahead of Microsoft.
RIM posted a second-quarter net loss of $235 million, or 45 cents a share, compared with net income of $329 million, or 63 cents, a year earlier. The company expects to have an operating loss this quarter and face “continued pressure” on its operating results for the remainder of the fiscal year, Chief Financial Officer Brian Bidulka told analysts on the call. He said RIM is using “aggressive pricing initiatives” to sustain the growth of its subscriber base.
“While we applaud the cost and balance sheet improvements, we’d note that selling devices below cost to boost its subscriber base is likely not a viable business solution long term,” said William Power, an analyst at Robert W. Baird & Co. He left his rating unchanged at the equivalent of a sell.
Scotia Capital Inc.’s Gus Papageorgiou raised his rating to sector perform, and Kris Thompson, an analyst at National Bank Financial, boosted his rating to outperform.
Heins, who became CEO in January, has embarked on a cost- cutting plan to stem losses at the company. He’s eliminating almost a third of its workforce and shutting down manufacturing sites to boost efficiency.
RIM also has hired JPMorgan Chase & Co. and RBC Capital Markets to help explore its strategic options. Heins told analysts yesterday that he’s met with CEOs at various organizations over the past several months to discuss BB10 licensing and partnerships. He plans to continue meeting potential partners and hasn’t set a specific timeframe for the end of the review. Heins has said in the past that he hasn’t ruled out a sale of the company, though that’s not his focus.
RIM needs to keep talking to potential partners because there’s no guarantee that BB10 will be the company’s savior, said Jaguar Financial’s Alboini.
“RIM is still losing money,” he said. “You have to have a push-the-button, ready-to-go backup plan.”
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