Research in Motion Announces Loss, Nextel Deal
Research in Motion Ltd. (RIM), the Ontario, Canada maker of the popular BlackBerry wireless e-mail device, reported a net loss in line with company guidance for its fiscal third quarter. The company also announced a new partnership with Nextel Communications, Inc.
RIM said its net loss for its fiscal third quarter was $6.3 million or eight cents per share. That compares to a net income of $1.5 million or 2 cents per share in the third quarter of last year.
Revenue for the quarter was $70.9 million, up 15 percent from the $61.6 million recorded last year. Sales of BlackBerry accounted for approximately 82 percent of RIMs quarterly revenue. RIM Wireless Handhelds accounted for 12 percent. OEM radio modems and other revenue accounted for 6 percent.
Given the slow economy, as well as problems with the rollout of BlackBerry products by wireless service providers, RIM adjusted upward its forecasted net loss for the fourth quarter to be in the range of 13 to 15 cents. Previously RIM had forecast a net loss of eight to ten cents per share.
"I am pleased that we were able to execute and meet our forecasted revenue and earnings this quarter given the current economic conditions and delays in the rollout of the GPRS (General Packet Radio Service) networks," said Jim Balsillie, Research in Motions Chairman and co-chief executive officer, in a prepared statement.
Business use of BlackBerry increased from 12,000 to 13,200 companies, a rise of 10 percent. Over 3,800 companies have installed the BlackBerry enterprise server, said Balsillie. As of December 1, the total number of BlackBerry subscribers increased 44,000 to approximately 289,000.
Research in Motion also announced an agreement with Nextel Communications, Inc., under which Nextel will resell a newly developed BlackBerry device to operate on Nextels iDen network, along with the requisite software and services. Financial details were not disclosed. RIM said product and service information will be announced at a later date.
"We have completed a substantial amount of the necessary iDen radio development and are targeting availability of iDen BlackBerry in the latter part of calendar 2002," said Balsillie in a conference call following the earnings announcement.
RIM has signed a number of similar deals in recent months to provide BlackBerry hardware and service in the United States and Europe. In October, RIM announced an agreement to provide VoiceStream Wireless Corp with BlackBerry wireless handhelds with requisite software and services for nationwide distribution on VoiceStreams GSM/GPRS network.
"These new relationships will significantly increase our BlackBerry distribution channels and market coverage next year," said Balsillie in a prepared statement.