RIM Sees Holiday Bump After Week From Hell

by Jordan Richardson on December 28, 2012

There is some good news coming out of Waterloo for a change, as Research In Motion saw its stock rise nearly 12 percent on the Toronto Stock Exchange on Wednesday. It also saw similar gains on Thursday on the New York Stock Exchange.

These gains followed what was an objectively bad week for RIM. Its stock was hammered last week after announcing a new fee structure on a conference call. Stock value plunged over 20 percent last Friday over investor fears that new fees would “pressure the high-margin business.”

But now, optimism about BlackBerry 10 products is floating the stock again. Part of the good news has come because of a better-than-expected third quarter. In the three month period ending on December 1, 2012, RIM posted a five percent drop in revenue from the same period last year and an adjusted net loss of $114 million.

Although those digits don’t sound good, they’re actually not as bad as anticipated.

And there was some good news. RIM shipped 6.9 million smartphones in the quarter, as well as 255,000 PlayBooks. They also saw a cash increase of $600 million to $2.9 billion.

CEO Thorsten Heins has reiterated that BlackBerry 10 devices are set to roll out “on time” for the January 30, 1013 launch date. He also announced an increase in marketing spending to help grease the wheels for the new devices’ arrival, which could pan out to a loss in the fourth quarter depending on how well the gamble pays off.

By December 27 at closing time, shares on the TSE settled at $11.70. On the NYSE, shares closed at $11.76 despite moving higher over the course of the day.

Some of the explanation for the gains came as photos of BlackBerry 10 products emerged online on Wednesday and Thursday. Our own Andrew Roach noted the new visuals, exploring the removal of the physical keyboard and the inclusion of its larger screen.

“There certainly are folks that believe in the new product cycle,” Evercore Partners analyst Mark McKechnie says. “The whole Wall Street community’s been trying to handicap how strong that product cycle will be for RIM.”

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Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

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