Traverse City Record-Eagle

Business

March 29, 2013

RIM sees success in 4Q

TORONTO (AP) — Research In Motion Ltd., once written off as dead amid fierce competition from more modern mobile devices such as the iPhone, surprised Wall Street Thursday by returning to profitability and shipping more BlackBerry 10 phones than expected in the most recent quarter.

It will take several quarters, though, to know whether RIM is on a path toward a successful turnaround. RIM just entered the crucial U.S. market with the new phone last week. And despite selling a million BlackBerry 10 phones in other countries, RIM lost subscribers for the second consecutive quarter.

Thursday's earnings report provided a first glimpse of how the BlackBerry 10 system, widely seen as crucial to the company's future, is selling internationally and in Canada since its debut Jan. 31. The 1 million new touch-screen BlackBerry Z10 phones were above the 915,000 that analysts had been expecting for the quarter that ended March 2. Details on U.S. sales are not part of the fiscal fourth quarter's financial results because the Z10 wasn't available there after the quarter ended.

Investors appeared happy with the financial results. RIM's stock rose 34 cents, or 2.4 percent, to $14.91 in afternoon trading Thursday after the release of results. Many analysts had written RIM off last year, but now believe the Canadian company has a future.

"I thought they were dead. This is a huge turnaround," Jefferies analyst Peter Misek said from New York.

Misek said the Canadian company "demolished" the numbers, especially its gross margins. RIM reported gross margins of 40 percent, up from 34 percent a year earlier. The company credited higher average selling prices and higher margins for devices.

"This is a really, really good result," Misek said. "It's off to a good start."

The new BlackBerry 10 phones are redesigned for the new multimedia, Internet browsing and apps experience that customers are now demanding.

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