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

UPDATED: RIM shipped approximately 6.9 million BlackBerry smartphones and 255,000 PlayBook tablets in Q3.
Written by Rachel King, Contributor

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.


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

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