Instant view: RIM reports quarterly loss but cash pile grows

(Reuters) - Research In Motion Ltd reported a smaller-than-expected quarterly loss on Thursday and the struggling BlackBerry maker managed to increase its cash pile in the run-up to the launch of its make-or-break line of next generation devices.

Having sufficient cash on hand is seen as crucial to a successful launch of RIM's line of revamped smartphones that will run on its new BlackBerry 10, or BB10, operating system.

The company has staked its future on BB10. A one-time smartphone pioneer, RIM has watched the BlackBerry lose market share in recent years to the likes of Apple Inc's iPhone and Samsung Electronics Co's Galaxy.

COMMENTARY:

TODD COUPLAND, ANALYST, CIBC WORLD MARKETS

"I think what (the result) says is it looks like RIM is starting to stabilize the platform, and then of course it will be how do the new products do once they bring them out.

"(Happy with the cash position) particularly when its going up in quarters when they're spending money to restructure. The reason it's going up is the services business is so profitable and generating cash still."

"The business need to stabilize and then whatever level that is, they need to get themselves to cash break even. Then they don't need to worry about it and they can focus on product development and marketing, positioning, branding and all that.

"They're not all the way through the restructuring, so I expect that's the goal, to get the company stabilized and roughly cash flow break even prior to BB10 launch."

COLIN GILLIS, ANALYST, BGC PARTNERS

"You still have revenue declining 31 percent on a year-over-year basis but it's certainly not the train wreck that a lot of people feared. They've got to make it through to BlackBerry 10, they've got north of $2 billion in cash, it's not going to be an issue, they still shipped 7 million units, but making it through to BB10 doesn't mean that it's going to get traction, but if it does it could be game on."

"It looks like ASPs moved up. I want to hear what they say about that. We'll have to see when they give us the formal breakout but I'm looking at $229 versus $206. That's a pretty sharp uptick."

"There is so much focus on 10 (but) there is room in the market for 7 products if you price them right and position them correctly as an entry-level phone. If they can get their costs right and get themselves profitable selling 7 million of the 7s they could have a nice little business right there."

"They live to fight another day. The problem is they are still going to lose many in the current quarter."

PETER MISEK, ANALYST, JEFFERIES

"It's very impressive. I didn't expect they could execute on the business given the models they have in the market, but they obviously did really well in emerging markets. They really, really did, so good for them, but unfortunately they're still five months away from their BB10 devices and we think that's probably too late for them. Nothing's really changed in our fundamental view but this was obviously excellent management execution."

"They targeted emerging markets where an iPhone or an Android device won't work, where the infrastructure can't handle the load, and a BlackBerry is a much better way of connecting to the system. They've been very intelligent about going after markets where the competition wasn't as strong."

PAUL TAYLOR, CHIEF INVESTMENT OFFICER OF FUNDAMENTAL EQUITIES, BMO ASSET MANAGEMENT, TORONTO

"The fact that (cash) was up, that they're not in a cash burn situation, and with the right-sizing of the workforce, presumably some of their expenses are being run more in line with their likely future reduced revenues. So from a financial performance perspective, it's probably a good outcome in the short term."

SHAW WU, ANALYST, STERNE AGEE

"Much better than feared, for sure. We had thought there was a chance this could happen, because everyone had been so negative and expecting a disaster.

"It's still bad, but it's a much smaller disaster than expected. These stocks all trade on expectations. Expectations were really low, and they were able to beat that."

"They shipped more than a million better than expected. They also lost a lot less money than expected, and the cash balance, even though they lost money, they were able to grow it slightly."

(Compiled By Frank McGurty)

Source: http://news.yahoo.com/instant-view-rim-reports-quarterly-loss-cash-pile-203813014--finance.html

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