Feeds

RIM edges into Q4 loss

Subscriber wins, tax gains ease effect of NTP settlement costs

  • alert
  • submit to reddit

Reducing security risks from open source software

Blackberry maker Research in Motion saw its subscriber base rise past the 2.5 million mark during its most recently completed fiscal quarter, Q4 FY2005, as service and software revenues began to slow the company's dependence on hardware sales.

However, the effect of the company's legal battle with NTP hit earnings hard, though some canny accounting eased the pain.

For the three months to 26 February 2005, RIM recorded revenues of $404.8m, up 11 per cent on the previous quarter and 92 per cent on Q4 FY2004. Some 66 per cent of the quarter's revenue arose from sales of Blackberry hardware, down from 71 per cent in Q3. Of the rest, 17 per cent came from service deals - the same as the previous quarter - but software-derived revenue jumped from seven per cent of the total last quarter to 14 per cent in Q4.

That suggests RIM is indeed winning the support of rival handset vendors. RIM's hardware revenue has been climbing steadily through recent quarters, increasing the extent to which it competes with the very handset manufacturers it's been trying to court with software deals. Increasing its software revenue will not only make such sales easier - in effect it becomes less of a direct competitor - but steers the company towards better long-term revenue opportunities.

RIM lost $2.6m during the quarter (one cent a share) on a GAAP basis, as it forked out $294.2m and a separately accounted for $20m to cover what it owes NTP for the settlement of the two firms' long-running patent infringement fight. Some tax jiggery-pokery resulted in a gain of $151.6m, which along with the company's operating income, also helped reduce the quarterly net loss.

Of course, playing the deferred tax asset card now means the company will have to cough up in later quarter, essentially by paying a higher rate. But at least it won't have the NTP settlement debt hanging over its head, and rising revenues (it hopes) will ease the burden. It ended the quarter with $1.7bn in the bank.

For the year as a whole, RIM reported a GAAP net income of $213.4m (109 cents a share), up from $51.8m (31 cents a share) the previous year. Revenue for the year was up 127 per cent from $594.6m to $1.35bn.

RIM quit the quarter with 2.51 million subscribers, 470,000 more than it had at the end of Q3 and 135 per cent more than FY2004's tally of 1.07m.

FY2005's user total will increase by 560,000-590,000 during Q1 FY2006, RIM forecast, contributing to revenues of $430-455m. Q2 FY2006 revenues are likely to fall between $460m and $485m, it added. Earnings will range from 51-56 cents a share in Q1, to 57-63 cents a share in Q2, the company predicted, no doubt encouraged by the deals it can go on to do in the US now it's no longer operating under NTP's shadow. ®

Related stories

Kill the Crackberry!
RIM settles NTP lawsuit for $450m
RIM signs IM pacts
Smart phone shipments break records
RIM rejects NTP patent win
RIM stock rises on acquisition speculation
O2 falls for Blackberry 'Charm'
RIM infringed NTP patents, appeal court rules

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.