TORONTO (AP) — Struggling BlackBerry maker Research In Motion Ltd. will release its fiscal second-quarter results after markets close Thursday, coming as the company tries to hang on to its subscriber base while preparing to release its much-delayed new phones next year.
WHAT TO WATCH FOR: The rate of decline in RIM's existing business ahead of the release of new smartphones deemed critical to the company's survival.
RIM executives said at a conference for mobile applications developers on Tuesday that the company has 80 million subscribers, up from 78 million in early June. Colin Gillis, an analyst with BGC Financial, said that was a pleasant surprise because many analysts had expected RIM would start losing subscribers in the second quarter.
The company's stock jumped 6 percent, or 40 cents, to close at $7.00 in U.S. trading on Wednesday. It is still down 52 percent for 2012.
Gillis said the average selling price for its devices will be important because it will show how much the company is reducing prices to gain market share.
"The 80 million subscriber number was a big number. Now did they make that number selling phones north of $200 or south of $200," Gillis said. Gillis said the stock market might be anticipating a decay of RIM's business too quickly.
Jefferies analyst Peter Misek said the 80 million subscribers also surprised him but he noted not all subscribers are created equal.
"We suspect that they've lost a lot of subs in the U.S. and western Europe and gained subs in Africa. Frankly, a prepaid sub in Africa is worth a lot less than in the United States," Misek said.
WHY IT MATTERS: RIM fathered the ground-breaking BlackBerry in 1999 but has struggled in recent years to compete with flashier phones like Apple's iPhone and phones running Google's Android software. RIM is banking its future on its much-delayed BlackBerry 10 platform, which is meant to offer the multimedia, Internet browsing and apps experience that customers now demand. The new smartphones are due out early next year.
The Waterloo, Ontario-based company has hired a team of bankers to help it weigh its options. Those include partnering with other companies, licensing software and overhauling its business.
Chief Executive Thorsten Heins remains defiant about not selling the company and has said he can turn things around. He told The Associated Press that his charter from the RIM's board is very clear: long-term value creation.
WHAT'S EXPECTED: Analysts polled by FactSet are forecasting a second-quarter loss of 47 cents per share on revenue of $2.49 billion.
LAST YEAR'S QUARTER: RIM earned $419 million, or 80 cents per share, on revenue of $4.2 billion.
- Investment & Company Information