Grim times for RIM: BlackBerry maker records $235M Q2 loss

The company's financial picture looks bad, but at least it exceeded Wall Street's lowered expectations.

RIM CEO Thorsten Heins in happier times: The company's BlackBerry Jam developer conference on Tuesday.
Lynn La/CNET

It didn't take long for the high of Research In Motion's BlackBerry Jam to wear off.

Fresh off its developer conference, filled with cheery rhetoric from the leadership team and a demonstration of the capabilities of its next-generation BlackBerry 10 operating system, the company posted a fiscal second-quarter loss of $235 million, or 45 cents a share. That's a reversal from the profit of $329 million, or 63 cents a share, it posted a year ago.

Its revenue plunged 30 percent to $2.9 billion from $4.17 billion a year ago.

The results reflect the harsh reality that RIM faces in the midst of its big turnaround. No amount of upbeat speeches or product demonstrations can compensate for the steep losses that the company is incurring -- with even larger losses looming ahead. Ultimately, it's just one of the companies swept up by a business increasingly dominated by Apple and Samsung, and one of many companies eager for a comeback.

Excluding its restructuring costs, its adjusted net loss was $142 million, or 27 cents a share.

The results were at least slightly better than Wall Street's low expectations. Analysts, on average, had projected a loss of 46 cents a share and revenue of $2.5 billion.

As a result, RIM shares soared nearly 20 percent to $8.55 in after-hours trading today.

The company ended the quarter with a little more than $2 billion in cash, cash equivalents, and short-term investments.

RIM did add 2 million subscribers in the quarter, which it disclosed at BlackBerry Jam on Tuesday, bringing its total base to 80 million.

The company shipped 7.4 million BlackBerry smartphones and 130,000 PlayBook tablets.

"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," CEO Thorsten Heins said in a statement.

The problem is the customers are largely being added in emerging markets in which consumers are buying their first smartphones. There, products often yield lower profits because they are more affordable devices.

RIM continues to lose market share in key markets, including its home North American market, where consumers are abandoning their BlackBerrys for iPhones and Android devices. Indeed, analysts expect BlackBerry customers to drop their phones and move to the recently released iPhone 5, or the number of flagship Android products out for the holidays, from the Galaxy S III to the Droid Razr HD.

The company warned that it would continue to post an operating loss in the third quarter as it "works through the transition to BlackBerry 10 and its job cuts. It also faces pressure to lower its monthly service fees. To drive sales of its upcoming phones, the company said it would invest in targeted marketing.

RIM didn't show off a product at its developer conference, a disappointment to some, but the company said it was on track to launching the new phones early next year.

Updated at 2:01 p.m. PT: to include its financial outlook and a comment from the CEO.