RIMM ( $22-$19) Cap=$1.55 bil posts loss, issues warning
(UPDATE: Adds estimates for fourth quarter, fiscal 2003. Figures in U.S. dollars unless noted.)
By Jeffrey Hodgson
TORONTO, Dec 20 (Reuters) - Research In Motion (NasdaqNM:RIMM - news) (Toronto:RIM.TO - news) reported a third-quarter loss on Thursday that was in line with expectations, but warned its fourth-quarter results would be worse than previously expected.
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The Waterloo, Ontario-based maker of the popular BlackBerry wireless device said in a statement that its loss for the quarter ended Dec. 1 was $6.3 million, or 8 cents a share, compared with net income of $1.5 million, or 2 cents a share, in the corresponding quarter last year.
Analysts surveyed by Thomson Financial/First Call were expecting, on average, a loss of 8 cents a share.
Revenues rose 15 percent to $70.9 million from $61.6 million.
``We continued to announce new agreements with major European and North American carriers, such as Telecom Italia Group, VoiceStream and Nextel,'' RIM chairman and co-chief executive Jim Balsillie said in a statement.
``These new relationships will significantly increase our BlackBerry distribution channels and market coverage next year.''
EARNINGS WARNING
But in a conference call with analysts and media, the company cuts its revenue and earnings targets for the fourth quarter.
RIM lowered its fourth-quarter revenue target to a range of $65 million to $70 million from $75 million to $80 million. The firm also said it sees a fourth-quarter loss per share of 13 to 15 cents, higher than its previous guidance of a loss of 8 to 12 cents.
``We have continued to see slippage in the launch schedules of carriers, and therefore slippage of the timing of their BlackBerry offerings in the U.S. and in Europe,'' RIM chief financial officer Dennis Kavelman told the conference call.
``All indications show that the February quarter represents the bottom of this transition period. Visibility is improving. We anticipate a sequential increase in Q1.''
The company maintained its guidance for fiscal 2003. It said its its estimated revenue range for the first quarter is $75 million to $80 million. Its current estimate for the first quarter is for a loss in the range of 10 to 12 cents.
NEXTEL DEAL
Separately, RIM announced on Thursday it had struck a multiyear agreement with Nextel Communications Inc. (NasdaqNM:NXTL - news) to develop a new BlackBerry wireless handheld device that will operate on Nextel's iDEN network.
Under the terms of the agreement, Nextel has committed to purchase BlackBerry devices with associated software and service. Further details of the agreement were not disclosed.
The total number of BlackBerry subscribers increased to about 289,000 at Dec. 1 from about 246,000 at the end of the last quarter. RIM said more than 13,200 companies were using BlackBerry in their organizations, a 10 percent increase over the prior quarter.
Gross research and development expenditures rose to $14.1 million, 20 percent of revenue in the quarter, from $11.0 million, or 14 percent of revenue in the second quarter. Net research and development expenditures were $10.5 million in the quarter.
RIM's holdings of cash, cash equivalents and marketable securities were $656.3 million at Dec. 1, down from $672.9 million at the end of the previous quarter.
Kavelman said the company expects a quarterly cash burn rate of $25 million to $30 million going forward.
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