Research in Motion shares up 12% on results
RESEARCH IN Motion Ltd, after buying itself breathing room on Thursday by delivering stronger-than-expected quarterly results, still faces the formidable task of delivering a make-or-break line of new BlackBerry devices early next year.
The more stable cash position that RIM achieved during its fiscal quarter ended September 1st will give the company a fighting chance to market the new BlackBerry 10 effectively, while ramping up full production of the revamped line, analysts said.
Until Thursday’s results, RIM was being written off by analysts because of its failure to keep pace with innovations from rivals such as Apple and Samsung .
Investors responded to the rare glimmer of good news for the embattled company by pushing up RIM’s downtrodden share price by more than 12 per cent yesterday.
I have to admit they did a very good job making the best out of a really tough situation. You’ve got to give management some credit for that, but they still need to nurse the company back to health, said Sterne Agee analyst Shaw Wu.
The company is counting on BB10 to arrest a precipitous decline in market share over the past year and longer.
But the success or failure of the BB10 will hinge by how warmly it’s embraced by consumers, many of whom have already switched to Apple’s iPhone and Samsung’s Galaxy, especially in North America and Europe.
Test versions of the BB10 have won praise from carriers and developers, but the true test hinges on RIM’s ability to win back market share and the hearts of an ever-growing base of touchscreen users.
Even though RIM’s aging line- up has lost ground in North America and Europe, the BlackBerry maker managed to top shipment and revenue expectations in its second quarter, thanks largely to strong sales of smartphones in emerging markets such as India and Indonesia.
National Bank Financial upgraded RIM’s stock, while BMO Capital Markets and Barclays Capital were among brokerages that raised price targets on its shares. Shares of RIM, which rose 20 per cent after Thursday’s close, opened up 12.8 per cent at $8.04 on the Nasdaq yesterday. – (Reuters)