Subject: [NEXTEL-1] Nextel Drops Price On Wackberrys (Nah...)

From: [email-masked]
Date: Fri, 26 Sep 2003 12:19:21 -0400

Nextel Drops Price On Wackberrys (Nah...)

Research In Motion returns to profitability, Q2 revenue soars
to US$125.7M
Updated at 18:36 on September 25, 2003, EST.

WATERLOO, Ont. (CP) - Higher sales of BlackBerry e-mail products this summer
helped Research In Motion return to profitability ahead of schedule, earning $2.1
million US in the three months ended Aug. 30, the company said Thursday.
The Waterloo-based company, which reports in U.S. dollars, said its revenues were
$125.7 million US in its second quarter, up 70 per cent from $73.4 million US a
year earlier and up 20 per cent from $104.5 million in the first quarter. Earnings
amounted to three cents a share and compared with a $14.2 million loss, or 18
cents a share, in the same period of last year and compared with a net loss of
$8.2 million, or 11 cents per share, in the first quarter ended in May.

The Waterloo, Ont.-based company also revised its revenue targets upward for the
current third quarter.
RIM's revised outlook is for between $140 million and $150 million US in revenue,
up the previous estimate of between $115 million and $125 million. Fourth-quarter
revenues are expected to be between $150 million and $160 million US.
RIM had alerted investors Sept. 8 that its revenue and earnings would be better
than previously expected.

Its shares (TSX:RIM) jumped 22 per cent the day to $47.16 Cdn on the Toronto Stock
Exchange after the announcement and have remained well above $42 Cdn since then.
The stock closed at $48.23 on Thursday before the earnings annoucement.
"We are pleased with RIM's performance this quarter," RIM co-chief executive Jim
Balsillie said in a conference call with analysts after the results were released.

"While summer traditionally represents a quieter period business environment for
many companies, RIM experienced favourable business conditions this quarter."

Among developments in recent months, RIM:

- Successfully launched a marketing strategy aimed at "pro-sumers" professionals
and high-end consumers.

- Supported a strategy by U.S.-based wireless network provider Nextel to offer
lower prices to individuals and business customers for some BlackBerry models.

- Recorded subscriber additions to the BlackBerry communication service spread
across a broad base of wireless networks.

- Increased numbers of companies deploying the BlackBerry or expanded the number
of BlackBerry users in their organizations.

Sales of RIM's older models remain strong while the company benefited as
established customers upgraded to newer models, Balsillie said.

"Our manufacturing team has successfully scaled production levels to match
increased demand over the quarter," he added.
"We're currently operating two full shifts five days a week with a partial third
shift operating in key process and product areas."
Research In Motion plans to expand capacity at its manufacturing plant in
Waterloo, currently at close to two million units annually, to 2.5 million a year
following an investment in plant and equipment in the current third quarter.
"Our strategy of manufacturing RIM's products in-house remains unchanged,"
Balsillie.

By locating manufacturing and development facilities close together, the company
has been able to reduce time-to-market and ensure product quality, he said.

Dennis Kavelman, RIM's chief financial officer, said the company expects continued
strong revenue growth in the fiscal third and fourth quarters - spanning the
September to February period.

RIM previously estimated it would have a loss of two cents US per share to a
profit of three cents US per share in the current third quarter, excluding the
costs of money being set aside in the event loses a U.S. patent dispute with NTP
Inc.
"We are now expecting adjusted EPS, not counting the litigation, in the range of
14 to 20 cents US for Q3," Kavelman said.
Using generally accepted accounting principles, the third-quarter earnings are
expected to be between five and 10 cents US. In the fourth quarter, the GAAP
earnings are expected to be in the range of seven to 12 cents, he said.

Fifty-three per cent of second-quarter revenue came from sales of BlackBerry
hand-held e-mail devices. The BlackBerry service, which routes e-mail devices from
sender to receiver, accounted for 32 per cent of revenues.

The total number of BlackBerry subscribers increased by about 96,000 from the
company's first quarter, ended in May, to 711,000.
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