BlackBerry maker Research in Motion said Thursday it lost $235 million in the past quarter, in better-than-expected results that prompted a surge in its stock price.
Research in Motion (RIM) CEO Thorsten Heins speaks during the BlackBerry Jam 2012 conference on September 25 in San Jose, California. RIM said Thursday it lost $235 million in the past quarter, and predicted more losses in the current period as it readies its new smartphone platform for next year.
In the quarter that ended September 1, the Canadian-based firm posted its third consecutive loss, although not as bad as analysts had forecast, as the company struggled to keep pace in the fast-changing smartphone market.
The loss translates to 27 cents a share excluding special items, which was not as bad as Wall Street estimates of a loss of 46 cents per share. RIM shares, which have slumped to multi-year lows, rallied some 18 percent in after-hours trade.
"Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition," said Thorsten Heins, president and chief executive of the Ontario-based firm.
Heins said the BlackBerry 10 platform, which aims to revamp the smartphone to compete with the likes of Apple's iPhone and Google-based Android devices, "is on track to launch in the first calendar quarter of 2013."
BlackBerry 10 had been set to launch in late 2012, but RIM announced a delay earlier this year that prompted grim predictions for the company.
RIM said revenues in the fiscal second quarter rose two percent from the prior quarter to $2.9 billion, a figure some 31 percent lower than a year earlier.
RIM said it shipped 7.4 million BlackBerry smartphones in the period and 130,000 BlackBerry PlayBook tablets.
The company's global subscriber base rose to 80 million and the company's cash position edged up to $2.3 billion.
"Carriers and developers are responding well to previews of our upcoming BlackBerry 10 platform," Heins said. "Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company."
Still, RIM's statement warned "that there will be continued pressure on operating results for the remainder of the fiscal year based on the increasing competitive environment, lower handset volumes, increased marketing expense associated with the launch of BlackBerry 10."
The company is also planning a campaign "to aggressively drive sales of BlackBerry 7" before the launch of the BlackBerry 10 smartphones, which will mean an "operating loss" in the third quarter of fiscal 2013.
Industry analyst Jeff Kagan said RIM has fallen to third place in the smartphone market with around 10 percent market share, compared with more than 50 percent for Android and Apple's 34 percent, and needs a major overhaul to regain traction.
"Right now RIM is like our dear old Grandpa. We love him, we respect him, he was so important to us, but now he is just getting very old and everything is passing him by," Kagan said.
"BlackBerry 10 cannot be just another new product from the old company. This should be launched as a breakthrough product and a breakthrough remake of the company."
Analyst Colin Gillis at BGC Partners said it was positive to see RIM gain customers but that the challenge was to "increase subscribers while maintaining a level of pricing that allows for profitability."
While BlackBerry awaits the new platform, "there is still an ample room in the market in our view for RIM's current products if they were properly positioned" as entry-level devices and priced below $200, Gillis added.
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