Welcome to our live coverage of Research in Motion's second-quarter earnings, today's live analysis stars Globe investing reporter Tim Kiladze and technology reporter Omar el Akkad. I'm Shane Dingman, technology editor online, and I'll pretty much stay out of the way.
Currently, RIM shares are standing around 6.95 on the TSX.
Two key things CEO Thorsten Heins said this week: RIM's new phones are still expected to hit the market in the first quarter of 2013, and the company's subscriber base has grown to to 80 million users, up from 78 million last quarter
Shipments of BlackBerry smartphones were 7.4 million and shipments of BlackBerry PlayBook tablets were approximately 130,000
RIM reports "total of cash, cash equivalents, short-term and long-term investments was $2.3 billion as of September 1, 2012, compared to $2.2 billion at the end of the previous quarter, an increase of approximately $100 million from the prior quarter."
Heins quoted looking forward in the release: "carriers and developers are responding well to previews of our upcoming BlackBerry 10 platform."
Gives us the perfect segue to say, have you seen this video thanking BB10 developers for sticking with RIM?
Ok, so the entire "adjusted" part of RIM's adjusted net loss is the cost of laying off a whole bunch of employees.
If you add that cost to the total, RIM's eps loss was pretty much exactly what analysts expected. Take it out, and the loss is half as much.
In case any of you are wondering, the last time we did this, some investors wanted to know if this would be good to average down the cost of your RIM holdings. Last quarter I said it only make sense to lower your average cost if you're absolutely certain the stock will climb higher. If you've already missed the 17 per cent surge in after markets, you would have to hope it will climb higher. If you buy more and it sinks, you just put yourself into more trouble.
Here's a very optimistic prediction from one of our commenters:
"giovan3 - 4:40 PM on September 27, 2012: 2013 the year of the Blackberry , time to buy Rim .Next year this time 25 per share ."
Another thing to keep in mind: developers. RIM knows it won't survive without awesome apps, which allow users to play things like Draw Something. (Or in my case, monitor my Fantasy Football scores.) The company is doing all it can to lure them back, holding things like developer meetups, but it remains to be seen how many will be lured to develop on the new platform
Tim, safe to say today's results are a pleasant surprise for market watchers?
Also, as Omar pointed out earlier today, even though the subscriber base was up this quarter to 80 million, much of the growth is in regions where the smartphones are sold for much less than they are in North America. That hurts margins. Just something to keep in mind.
Overall, the earnings are certainly a pleasant surprise. At the very least, they're a reprieve from so many quarters of bad news. The company need to buy some time to breathe and really focus on the new phones, and these results help with that.
RIM CEO: "BlackBerry 10 is on track to launch in the first calendar quarter of 2013."
We're listening in to RIM's conference call now.
Thorsten Heins speaking to strategic review, cost cutting...
"The entire company is energized and excited for the first BlackBerry 10 phone..." pulling out all the dev buzzwords, "we not only understand social networking, WE EMBRACE IT."
Over the past 3 weeks, RIM has met with carriers in 16 countries to show them BB10 demos and preview the associated marketing campaign.
Heins pumped about seeing users try BB10 phones (touch and QWERTY editions)
In the same tone of voice used to describe his excitement about the BB10 features, Heins shows "empathy" for the difficult cuts ("executing our internal targets") at the halfway point of the fiscal year. Promises "additional operational and financial benefits" in the coming quarter from the program.
RIM CEO has also been meeting with CEOs from other companies to talk about opportunities for licensing and partnerships. Doesn't name names.
Sales outside of Western markets were 58% of revenue, down from 63% last quarter
Revenue in Canada increased from the first quarter, representing 8% of sales
PlayBook orders from retailers up for Holiday season in Canada and the U.K.
RIM warns of more losses in Q3 and Q4 on restructuring, but expects cash position to remain roughly level
Conference call question: Of the 80 million users, who will upgrade to BB10? Heins not clear on actual numbers, predicts winning new users
BB10 will be a global launch, says Heins. Touts "new user paradigm" again with BB10 "hub" and "flow" features
Interesting to note Heins says BB7 will be sticking around in some markets for "entry level users" ... sounds messy to me.
Also, Nasdaq aftermarket saying RIMM up 1.42, or 19.89%
Heins says the recent message network breakdown was not "an outage" just a slowdown, a bottleneck where the messages were eventually delivered.
Consumers seem to have made up their minds before customers go in the store? How will you fix that, and who will pay for your marketing costs to make the BB10 launch work?
Heins doesn't really answer, just says he's confident he can get it done, and his world tour with carriers is about trying to solve that.
Well, that about does it, sorry we slowed down there not too much happened in the Q&A. Check back tomorrow morning for Omar's latest analysis!