BlackBerry maker Research in Motion lost $235 million in the second quarter

BlackBerry maker, Research In Motion says it lost $235 million in the second quarter compared with net income of $329 million in the same quarter a year earlier. The report beat analyst expectations.

The company said revenue in its fiscal second quarter, which ended Sept. 1, was $2.9 billion, down 31 percent from $4.2 billion a year ago, but up from $2.8 billion in the first quarter.

The BlackBerry maker, which keeps its books in U.S. dollars, says the loss amounts to 45 cents per diluted share.

“Make no mistake about it, we understand that we have much more work to do,” the chief executive, Thorsten Heins, said in a statement. “But we are making the organizational changes to drive improvements across the company.”

RIM shares surged in after-hours trading on the news that its loss for the second quarter was considerably smaller than analysts had been expecting. As of 4:35 p.m. ET, shares were up nearly 16 per cent at $8.27. They had closed the day, minutes earlier, at $7.14.

“I don’t think anything good can come out until they release BB 10, aside from selling the company or something else in the strategic review,” said Peter Misek, an analyst with Jefferies & Company.

But Shaw Wu, an analyst at Sterne Agee, said the dominance of Apple and Android has closed the window of opportunity for RIM’s BlackBerry 10 strategy and turned the company’s last great hope into its biggest problem.

“It’s about survival now, it’s not about BlackBerry 10,” said Mr. Wu, who is based in San Francisco. “That’s almost secondary. The battle now is staying alive and looking after your current customers. It’s not really clear that their core customers are looking for BlackBerry 10.”

At a developers conference earlier this week, Mr. Heins, RIM’s chief executive, announced one of the few positive results from the quarter. Some analysts had speculated that growth in RIM’s subscriber base had stalled, or even declined, for the first time in its history. But Mr. Heins told the meeting in San Jose, Calif., that the number of BlackBerry users had grown to 80 million, up from 78 million.

Unlike other smartphone makers, RIM continues to directly profit from every active BlackBerry handset long after its sale. RIM receives monthly subscription fees from carriers for every BlackBerry in exchange for routing the phone’s data through its own, closed network. Under normal conditions, the network allows RIM to provide high security for corporate and government users and it reduces the amount of wireless data consumed by all BlackBerrys.

RIM is not in immediate danger of bankruptcy. The company reported on Thursday that it still holds $2.3 billion billion in cash, an increase of $100 million from with the previous quarter. But Mr. Wu said that costs associated with layoffs at the company as well as its unprofitability are now leading some users, including large corporate customers, to question RIM’s long-term survival. Unless BlackBerry 10 is an exceptional hit, which is far from certain, Mr. Wu said that RIM may be able to continue for only one or two more years.

But there were no signs of retreat from Mr. Heins. Like his predecessors, Jim Balsillie and Mike Lazaridis, he was boldly predicting that BlackBerry 10 will again allow RIM to stand alongside Apple, Google and makers of Android phones as a dominant player that defines the smartphone business.

“BlackBerry 10 introduces a shift to true mobile computing,” Mr. Heins told a RIM-sponsored gathering of software developers on Tuesday. “We are laying the groundwork for a fundamental change in how people communicate, collaborate and engage with each other.”

The net loss narrowed from the first quarter’s $518 million.

That compared with a profit of $329 million or 63 cents per share a year ago.

Excluding one-time costs including cost cuts and job reductions, RIM says it earned and adjusted profit of $142 million or 27 cents per share.

Analysts had expected RIM to post a loss of about 47 cents per share, according to a poll from Bloomberg.

Revenue totals $2.87 billion, down from $4.17 billion a year ago.

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