RIM’s Shocker Sends Shares Skyrocketing

Research in Motion (NASDAQ:RIMM) may have reported a loss on Thursday, but investors are counting the June to August quarter as a win for the BlackBerry maker, which bolstered its cash reserves and reported stronger-than-expected earnings ahead of the launch of its next-generation smartphones.

RIM shares surged more than 11 percent in early trading this morning following earnings, the biggest jump for the stock since a 50 percent surge in December 2003. Since the first iPhone debuted in 2007, RIM shares have declined over 92 percent, as Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), and smartphone makers producing Android devices eroded its market share. RIM’s new BlackBerry 10 devices, which will roll out late this year and early next, are the company’s last hope for survival in a market it once dominated.

Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.

Indications the company will have plenty of cash on hand to ramp up production of the new BB10 devices, and mount a strong marketing campaign, are cheering investors — it looks like BB10, RIM’s completely redesigned operating system, may have a fighting chance after all.

Furthermore, RIM’s second fiscal quarter wasn’t exactly the black hole investors and analysts alike had come to expect. The company not only generated more revenue than Wall Street had forecast, but it topped expectations for the number of devices shipped in the quarter, which ended September 1.

Helping to bolster second-quarter sales were emerging markets, where RIM’s lower-end smartphones appealed to more price-conscious shoppers. ”RIM and its products, however obsolescent, are still relevant in the parts of the planet where most people live,” said CCS Insight analyst John Jackson.

Still, RIM will have to execute on BB10. Right now, analysts don’t know what to expect from the new operating system and new smartphones. CEO Thorsten Heins gave a preview at a developers event on Tuesday, but while the general response was positive, those present said they really weren’t able to evaluate how well the devices would work in real-world conditions and up against some worthy adversaries.

And while second-quarter sales beat estimates, the company still did report a loss. Shipments of BlackBerry smartphones were 7.4 million in the quarter, outpacing expectations of about 6.9 million, while the Waterloo, Ontario-based company reported a net loss of $235 million, or 45 cents per share, a steep decline from a $329 million profit in the same period a year earlier. Excluding one-time restructuring-related items, the loss came in at $142 million, or 27 cents a share.

Revenue rose to $2.9 billion, a 2 percent gain from the fiscal first quarter, but down about 30 percent from the year-earlier period. Analysts had expected a loss of 46 cents a share on revenues of $2.5 billion, according to Thomson Reuters I/B/E/S.

Don’t Miss: RIM: These Results are Shocking Shorts.