RIM Still Looks Grim

NEW YORK ( TheStreet) -- Research In Motion ( RIMM) beat second-quarter expectations, but that doesn't mean it's out of the woods. Not by a long shot.

The Canadian-based company reported an adjusted loss of $142 million, or 27 cents a share, for its fiscal second quarter ended in August on revenue of $2.87 billion. The performance was well ahead of the average estimate of analysts polled by Thomson Reuters for a loss of 46 cents a share on revenue of $2.5 billion.

Even though shares are soaring in early morning trade, RIM still lost money. It didn't actually turn a profit. Revenue may have beat estimates, but it's still down nearly 40% year-over-year. That isn't a sign the company has turned a corner. It's a sign that the company has stopped the free-fall. For now.

The fact that RIM has 80 million global users and that its cash balance grew approximately $100 million to $2.3 billion are good points, but the cash growth might be a one trick pony, warns Sterne Agee's Shaw Wu. "We remain concerned with the sustainability given its accounts receivable balance has declined by $1 billion over the last two quarters and its core operation remains unprofitable," Wu wrote in a research note. He rates shares "neutral."

RIM CEO Thorsten Heins heavily hyped the company's new platform, BlackBerry 10 during a conference call late on Thursday. Heins said RIM has been meeting with dozens of carriers from 16 countries to show them the new platform, which is expected to ship in the first quarter of 2013.

It's still uncertain whether consumers will actually care, given that Apple ( AAPL) recently launched the iPhone 5 and Samsung's Galaxy S3 continues to sell extremely well. Wu wrote that he isn't sure whether BB10 will be effective against iOS, Google's ( AAPL) Android, and Microsoft's ( AAPL) Windows.

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