RIM's Q3 revenue fared well enough; CIO announces departure

RIM's Q3 revenue fared well enough; CIO announces departure

Summary: UPDATED: RIM shipped approximately 6.9 million BlackBerry smartphones and 255,000 PlayBook tablets in Q3.

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As the beleaguered mobile company rests virtually all of its hopes on the next release of its OS in January, Research In Motion still beat revenue expectations for its latest earnings report released on Thursday.

See also: RIM and BlackBerry 10: Palm 2.0 or a real comeback?

The BlackBerry maker reported a net income of $14 million for the third fiscal quarter, or 3 cents a share (statement). Non-GAAP loss was 22 cents a share on a revenue of $2.7 billion -- down 5 percent from the second quarter and down by 47 percent from the same time last year.

Nevertheless, RIM was only expected to report a third quarter loss of 35 cents a share on revenue of $2.66 billion.

The company's stock was initially up in after hours trading after closing at $14.13 per share for the day -- but shares were then quickly halted ahead of the third quarter report's release.

Glossing over Q3's highlights, CEO Thorsten Heins put the spotlight on the next quarter in prepared remarks:

RIM continued to execute on its product roadmap plans and to deliver on key financial metrics as it gets set for the global launch of BlackBerry 10. During the third quarter, we continued to demonstrate our strong financial position, generating $950 million in cash flow from operations, and increasing our cash position significantly to more than $2.9 billion. More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products, and beta trials of BlackBerry Enterprise Service 10 are underway at more than 120 enterprises including 64 Fortune 500 companies. This is an exciting time and our carrier partners, application developers and employees are all looking forward to unveiling the innovation and excitement of BlackBerry 10 to our customers on January 30, 2013.

Here are some numbers to know from RIM's third quarter:

  • The current BlackBerry subscriber base totals approximately 79 million users worldwide.
  • RIM shipped approximately 6.9 million BlackBerry smartphones and 255,000 PlayBook tablets in Q3. (Note the key word there is "shipped" -- not sold.)
  • Revenue breakdown for Q3: Roughly 60 percent for hardware, 36 percent for service and 4 percent for software and other revenue.
  • GAAP net income for the quarter from continuing operations was $14 million.

An extra nugget wedged in the third quarter report was that RIM's chief information officer Robin Bienfait is leaving the company at the end of this year. Bienfait has been with RIM for six years and is said to be staying on in a supporting role, only defined as "an advisory capacity to enable a smooth launch and seamless transition."

RIM doesn't provide guidance anymore, but Wall Street is projecting a loss of 26 cents a share on revenue of $2.87 billion for the fourth quarter.

UPDATE: During the quarterly conference call with investors on Thursday afternoon, Heins continued to talk up RIM’s high hopes for the launch of BlackBerry 10 next quarter.

He also touched a bit upon the release of BlackBerry Enterprise Service 10 as RIM’s strategy is to "position BlackBerry as the clear leader in the enterprise mobility market." Heins asserted that the company feels this strategy will help broaden the BlackBerry ecosystem over time.

However, Heins acknowledged that while Service subscribers are expected generate more revenue on a monthly basis, he admitted that subscribers that don't elect to pay for certain security and other BYOD-related services might harm revenue initially.

Heins followed up by reassuring that Services revenues "aren’t going away," but that RIM’s business models will simply evolve this way.

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Expect more to come from RIM execs about BlackBerry 10 on ZDNet after RIM's quarterly conference call today at 2PM PT/5 PM ET.

Images via RIM Investor Relations

Topics: BlackBerry, Mobile OS, Mobility, Smartphones, Tech Industry

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10 comments
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  • So I guess they're not quite dead yet, then

    Glad to see them hanging on.
    x I'm tc
    • True, though I'm sure some Apple Loving Zealot will point out

      that shipping 6.9 million BlackBerry smartphones is totally different then selling 6.9 million phones to customers.
      William Farrel
  • Hope they can keep holding on till 10 gets out.

    QnX is a great OS for embedded applications. One of the best I have used so I have high hopes for BBoS 10.
    Bruizer
    • @ Bruizer

      Second that opinion. I actually rate QnX ahead of even vxWorks which was also a great OS. QnX formed the original microkernel for Cisco's IOS and was instrumental in getting many embedded products off the ground, just like vxWorks did.

      Unfortunately, PC OSes including FreeBSD and especially Linux have run amok in the mobile phone OS world. It is a pity since by increasing the memory and storage requirements and ramming a PC OS onto a phone, the utility of a phone has not increased from that of being a phone though it is now called a smartphone. A smartphone still provides the same basic voice capabilities as a feature phone and it is not even as optimized as a Symbian OS phone or a vxWorks phone.
      calahan
  • RIM sold more than shipped.

    Thank you, Rachel, for so emphatically pointing out that 6.9M was SHIPPED and not SOLD because if RIM actually reported sold figure (by counting number of activations on the RIM network), the sold number would actually be higher than shipped number. This figure would not even include those handsets that sold contract free and were activated for voice only (because RIM would not be able to track this). I hope I didn't confuse you ;-)
    AfterSuperPhone
    • RIMM Report

      RIMM reports based on Canadian and USA law. However they announce shipments/sales/trash/toilet flushes/etc are prefaced by what the law allows and/or requires.

      That's why whether it be Apple, Samsung or whoever, they will note something is non-GAAP when they are trying to make a point beyond these rules. If they don't preface the remark, it's GAAP and you can use those numbers for comparison.
      Regulator1956
  • Odd

    No anti-RIM comments :)
    SinfoCOMAR
  • Good luck!

    Good luck, RIM. Love your Smartphones.
    ITOdeed
  • Playbook tablet outperforms iPad mini yet where are Rimm's sales?

    I've owned the Blackberry Playbook Tablet for 2 weeks now and am elated over how well it outperforms Apple's new iPad mini with strong hardware using their Qnx OS and has a kick butt browser for half the price or less. I guess marketing is not in Rimms budget? All they need to do is show specs to consumers and they'd eat this little Playbook up!
    mrbnsandiego
  • RTFN!

    "The BlackBerry maker reported a net income of $14 million for the third fiscal quarter..." -- and yet the numbers clearly show a net income of only $9 million.
    ldo17