* Fiscal Q2 loss $0.27/shr; Wall St view was loss of
* Fiscal Q2 revenue $2.9 bln; Wall St consensus $2.5 bln
* BlackBerry shipments in period 7.4 mln; Wall St view 6.9
* Shares jump 21 pct in trading after the bell in the U.S.
(Adds details on results, analyst comments; updates share move)
By Euan Rocha
TORONTO, Sept 27 Research In Motion Ltd RIM.TO
reported a narrower-than-expected loss on Thursday and the
struggling BlackBerry maker bolstered its cash reserves,
sparking optimism ahead of the launch of its make-or-break line
of next-generation smartphones.
Shares of the RIM surged more than 21 percent in after-hours
trade on indications the company will have sufficient cash to
push ahead with a robust marketing campaign for its revamped
BlackBerry 10 devices, due out in early 2013.
It was the biggest jump for the stock since a 50 percent
surge in December 2003, underlining the importance of the BB10
launch. The company, which has fallen far behind its rivals in
the smartphone market it once dominated, has staked its future
on the line, featuring a completely redesigned operating system.
RIM's second fiscal quarter brought shareholders additional
glimmers of hope, after a series of dreadful quarterly reports.
It not only generated more revenue than Wall Street forecast but
it topped expectations on the number of devices shipped in the
period, which ended Sept. 1.
"It's very impressive," said Jefferies & Co analyst Peter
Misek. "I didn't expect they could execute on the business given
the models they have in the market, but they obviously did
really well in emerging markets."
A one-time smartphone pioneer, RIM has failed to keep pace
with rivals such as Apple (AAPL.O) and Samsung Electronics Co
(005930.KS), and its share price has tumbled about 70 percent
over the past year as its market share shriveled.
But the latest quarter showed that RIM is still able to lure
buyers for its lower-end devices in the more price-conscious
emerging markets. That has helped make up for ground the
BlackBerry has lost to cutting-edge devices such as Apple's
iPhone and Samsung's Galaxy S III in North America and Europe.
"RIM and its products, however obsolescent, are still
relevant in the parts of the planet where most people live,"
said CCS Insight analyst John Jackson. "The bad news is that
these results have little or no bearing on what remains true,
and that is, RIM still needs to execute on BB10."
In an attempt to create a buzz, Chief Executive Thorsten
Heins gave a preview of the new smartphone and its features to
app developers at an event on Tuesday in San Jose, California.
Analysts said RIM struck the right chords at the event but
cautioned that it is hard to evaluate how well the BB10 devices
will work in real world conditions until they are on the market.
"We are now just a few months away from our launch and our
teams are working night and day to meet the expectations we have
of ourselves," said Heins on a conference call after the results
were released on Thursday.
The Waterloo, Ontario-based company reported a net loss of
$235 million, or 45 cents a share, in its fiscal second quarter.
That compared with a profit of $329 million, or 63 cents, in the
same period a year earlier.
Excluding one-time restructuring-related items, the loss
came in at $142 million, or 27 cents a share, in the quarter
Revenue rose to $2.9 billion, or 2 percent from the fiscal
first quarter, but the latest result was down about 30 percent
from the same period a year earlier.
Analysts, on average, had expected RIM to reported a loss of
46 cents a share, on revenues of $2.5 billion, according to
Thomson Reuters I/B/E/S.
"It's still bad, but it's a much smaller disaster than
expected," said Sterne Agee analyst Shaw Wu. "These stocks all
trade on expectations. Expectations were really low, and they
were able to beat that."
RIM increased its cash to about $2.3 billion from $2.2
billion in the fiscal first quarter.
"They also lost a lot less money than expected, and the cash
balance, even though they lost money, they were able to grow it
slightly," said Wu.
RIM's chief financial officer said the company had entered
into a new secured credit facility of $500 million which expires
in September 2013, and in the first half RIM realized some $350
million of the up to $1 billion in cost savings it hopes to
achieve in fiscal 2013.
Having sufficient cash on hand is seen as crucial to a
successful launch of the BB10 line.
Shipments of BlackBerry smartphones were 7.4 million in the
quarter, easily outpacing Wall Street's expectation of about 6.9
million shipments in the period.
RIM's U.S.-listed shares surged more than 21 percent to
$8.65 in trade after the closing bell on Thursday.
(Additional reporting by Alastair Sharp, Allison Martell and
Cameron French; Editing by Frank McGurty)
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