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RIM beats estimates, cuts revenue outlook

Research In Motion reports a first-quarter loss that is better than analysts' expectations, while revenue falls.

Richard Shim
2 min read
Research In Motion reported on Tuesday a first-quarter loss that was better than analysts' expectations, but cut its revenue outlook for the year.

The Waterloo, Ontario-based BlackBerry maker reported a net loss of $10.8 million, or 14 cents a share, for the quarter ending June 1. For the same period a year ago, the company reported a net profit of $3.8 million, or 5 cents a share.

Revenue fell to $71.6 million from $77 million a year ago.

Analysts were expecting the company to lose 19 cents a share, according to consensus estimates compiled by First Call.

During a conference call, Chief Financial Officer Dennis Kavelman cut the company's revenue outlook for the year, from between $375 million and $425 million to between $350 million and $375 million. Net loss per share for the year is expected to be in the range of 30 to 45 cents per share.

Kavelman said the company expects to return to profitability in the fourth quarter.

RIM plans to keep a tight control on expenses, spending only $40 million on business expenses in the second quarter. RIM spent $28.6 million in the first quarter, and as of June 1, had $616 million in cash, cash equivalents and marketable securities.

"I am pleased to report that RIM has once again achieved its quarterly performance targets as well as the strategic milestones that drive our continued success and leadership in the wireless enterprise sector," Chairman and co-CEO Jim Balsillie said in a statement.

In April, the company cut its sales and earnings forecast for the first quarter, expecting revenue "in the low $70 million range," down from the $75 million to $80 million the company had predicted in December. The company estimated a loss of 18 cents to 22 cents per share.

RIM reported an increase in the number of BlackBerry subscribers, up approximately 34,000 for a total of 355,000 as of June 1.

The average selling price of handheld devices increased from $380 in the prior quarter to $445 in the first quarter. The company received 39 percent of its revenue for the quarter from handhelds. Services made up 41 percent, software licenses made up 13 percent and radios and other revenue made up 7 percent.

In after-hours trading, RIM shares gained 14 percent to $11.93.