TORONTO - After several months of technical setbacks, layoffs and an eroding market share, BlackBerry-maker Research In Motion could get a mild reprieve from its compounding troubles on Thursday when it issues its second-quarter financial report.
But analysts say that if investors heave a sigh of relief, it won't be because RIM delivered a home run, but simply because the bad news, and its quarterly losses, didn't worsen as much as expected.
"The stock has fallen so far that any slight bit of good news is going to be good for (it)," said Neeraj Monga, an analyst at Veritas Investment Research Corp.
Considering the Waterloo, Ont.-based company's perilous situation, what defines "good" is relative.
This year, RIM has watched its market share in North America dramatically fall to about four per cent as the BlackBerry became an afterthought in the face of Apple's iPhone and the Samsung Galaxy S3.
And while other companies debuted new devices, RIM was forced to push the launch of its BlackBerry 10 operating system and new phones into next year, missing the crucial back-to-school and holiday shopping seasons.
The company has also made significant reductions across its operations, closing facilities, severing ties with certain manufacturers and announcing plans to lay off 5,000 workers across its global operations in an effort to save $1 billion by the end of its fiscal year.
Analysts would certainly be pleased if RIM delivered second-quarter results which show that its operating losses weren't as deep as expected.
Expectations peg the company's loss to be equal to 47 cents per share, according to a poll of analysts by Bloomberg.
It would also be considered positive if RIM showed that it isn't burning through its $2.2-billion cash reserve as quickly as some analysts expected.
Even more certainty around the launch of the much-delayed new BlackBerry smartphones could move the stock.
"We think shares will largely trade based on prospects for Blackberry 10," said Bill Kreher, a technology analyst for Edward Jones in St. Louis, Mo.
That leaves a lot of room for a gut reaction from investors when RIM reports after market close on Thursday.
This week, the company's shares moved higher after chief executive Thorsten Heins surprised analysts with an improvement in the number of subscribers to its services.
Heins said the company's user base grew to about 80 million at the end of its second quarter, up from 78 million in the previous quarter, a surprise to analysts who had widely expected RIM's subscriber base to falter in the quarter.
RIM's stock (TSX:RIM) rose 38 cents to close at $6.88 on Wednesday at the Toronto Stock Exchange.
The value of those new subscribers is still in question, as RIM has refocused its efforts to marketing lower-priced handsets, mostly in developing countries, which will negatively affect its average selling prices.
"Swapping high-value developed markets subscribers for prepaid subscribers in Africa and emerging markets doesn't seem like a strategy for long-term success," said Peter Misek, an analyst at Jeffries & Co., in an email.
He expects about 6.5 million BlackBerry phones were sold in the second quarter, while sales will erode to six million in the third quarter.
Revenues are pegged at $2.5 billion for the quarter, Misek said.
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Blackberry PlayBook Flops, Prices Slashed
The PlayBook tablet, which was the BlackBerry maker's answer to the iPad, went on sale in April 2011. Since then, <a href="http://www.huffingtonpost.com/2012/01/03/blackberry-playbook-price-rim_n_1181167.html" target="_hplink">RIM has lost $485 million</a> on unsold units. At the beginning of January, <a href="http://www.huffingtonpost.com/2012/01/03/blackberry-playbook-price-rim_n_1181167.html" target="_hplink">RIM slashed the price of all models</a> of its tablet to $299. The special pricing will last until February 4. PlayBooks, which come in 16, 32 and 64 gigabyte models, typically retail for $499, $599 and $699, respectively, <a href="http://news.cnet.com/8301-1001_3-57351162-92/blackberry-playbook-price-now-$299-for-all-models/" target="_hplink">according to CNET</a>. In November, RIM temporarily <a href="http://www.huffingtonpost.com/2011/11/22/blackberry-playbook-price-drop_n_1107941.html" target="_hplink">slashed the price</a> of the 16GB version of the tablet to $199 at certain retail locations.
In October, BlackBerry <a href="http://www.huffingtonpost.com/2011/10/13/blackberry-outage-2011-rim-says-services-returning_n_1008596.html" target="_hplink">suffered an outage that affected</a> many of its then 70-million worldwide users, leaving some of its customers in Asia, Europe, Latin American and Africa without service for as many as three days. Some users in the U.S. were affected, but not for as long a period.
Drunk Execs Disrupt International Flight
In December, two RIM executives were fired after a flight they were on was forced to be diverted because the pair's "drunken rowdiness," <a href="http://www.huffingtonpost.com/2011/12/02/two-men-face-hefty-fine-a_0_n_1125214.html" target="_hplink">the AP reports</a>.
BlackBerry 10 Platform Delayed
Research in Motion announced in December 2011 that its highly anticipated BlackBerry 10 platform won't be available until the end of 2012. <a href="http://www.huffingtonpost.com/2011/12/16/blackberry-10-phones-rim_n_1153314.html" target="_hplink">According to the AP</a>, the company claims the holdup is because the chipset needed for the phones running the platform won't be available until the middle of this year.
Stock Slides In 2011
In 2011, <a href="http://www.dailyfinance.com/quote/nasdaq/research-in-motion-limited-usa/rimm" target="_hplink">RIM's stock</a> dropped <a href="http://www.huffingtonpost.com/2012/01/23/rim-ceos-jim-balsillie-mike-lazaridis_n_1222605.html#s629929&title=Lessien" target="_hplink">a massive 75 percent</a>.
Falling U.S. Market Share
In less than a year, RIM's share of the U.S. smartphone market <a href="http://www.huffingtonpost.com/2012/01/23/rim-ceos-jim-balsillie-mike-lazaridis_n_1222605.html#s629929&title=Lessien" target="_hplink">dropped by almost 50 percent</a>, from <a href="http://www.comscore.com/Press_Events/Press_Releases/2011/3/comScore_Reports_January_2011_U.S._Mobile_Subscriber_Market_Share" target="_hplink">30.4 percent</a> in January 2011 to <a href="http://www.comscore.com/Press_Events/Press_Releases/2011/12/comScore_Reports_November_2011_U.S._Mobile_Subscriber_Market_Share" target="_hplink">16.6 percent</a> in November 2011. In 2009, <a href="http://www.huffingtonpost.com/2011/12/16/blackberry-10-phones-rim_n_1153314.html" target="_hplink">RIM controlled 44 percent</a> of the US smartphone market. (Pictured above is the HTC Desire HD Android, which runs on Google's much more popular Android platform.)
Investors Urge Company Sell Itself
A nearly 75 percent drop in stock price in 2011 did not please investors. At the end of 2011, Jaguar Financial Corp, <a href="http://www.huffingtonpost.ca/2012/01/03/balsillie-lazaridis-rim-research-in-motion-jaguar-financial_n_1180885.html" target="_hplink">one of the largest investors</a> in RIM, called "for substantial corporate governance change and for a sale of RIM, whether as a whole or as separate parts." Vic Alboini, the chief executive of Jaguar Financial, <a href="http://www.bbc.co.uk/news/business-16393180" target="_hplink">told the BBC earlier this month</a> that RIM has "lost it." "The party is over, we believe, in terms of trying to design that cool, tech savvy smartphone," he said. "Microsoft has over $50 billion in cash, RIM has $1.5 billion. There is no way they'll be able to compete."
The family of 11-year-old Kian McCreath of Coventry, U.K., gave RIM some of its worst publicity in 2012, telling the media the boy was burned and left with permanent scarring when his BlackBerry Curve 9320 exploded. Although cell phones that are left to charge too long are known to explode, for RIM the news represented a horrible publicity disaster that came just weeks ahead of the launch of its BlackBerry 10.