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Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported first quarter results for the three months ended May 28, 2011 (all figures in U.S. dollars and U.S. GAAP).
Highlights:
-- Revenue in the first quarter of fiscal 2012 grew 16% over the same quarter last year
-- International revenue(1) in Q1 grew 67% year over year
-- Gross margin in the quarter was approximately 44%, slightly higher than expected due to product mix
-- RIM launched the BlackBerry PlayBook tablet in North America and shipped approximately 500,000 units in the first quarter
Q1 Fiscal 2012 Results:
Revenue for the first quarter of fiscal 2012 was $4.9 billion, down 12% from $5.6 billion in the previous quarter and up 16% from $4.2 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 78% for hardware revenue, 20% for service and 2% for software and other revenue. During the quarter, RIM shipped approximately 13.2 million BlackBerry handheld devices and approximately 500,000 BlackBerry Playbook tablets.
"Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter." said Jim Balsillie, Co-CEO at Research In Motion. "RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012."
Net income for the quarter was $695 million, or $1.33 per share diluted, compared with net income of $934 million, or $1.78 per share diluted, in the prior quarter and net income of $769 million, or $1.38 per share diluted, in the same quarter last year.
The total of cash, cash equivalents, short-term and long-term investments was $2.9 billion as of May 28, 2011, compared to $2.7 billion at the end of the previous quarter, an increase of approximately $170 million from the prior quarter. Cash flow from operations in Q1 was approximately $1 billion. Uses of cash included intangible asset additions of approximately $560 million, capital expenditures of approximately $220 million and business acquisitions of approximately $30 million.
(1) Includes revenue outside of the U.S. and Canada
Cost Optimization Program:
The company also announced that it will begin a program to streamline operations across the organization, which will include a headcount reduction. This realignment will be focused on taking out redundancies and a reallocation of resources to allow us to focus on the areas that offer the highest growth opportunities and align with RIM strategic objectives, such as accelerating new product introductions. We expect to implement this program beginning in the second quarter with the benefits impacting results primarily in Q3 and beyond. Any one-time charges associated with this initiative are not included in our Q2 and full year outlook but will be identified and disclosed when we report our second quarter results.
Share Repurchase Program:
RIM's Board of Directors today also approved a share repurchase program to purchase for cancellation through the facilities of the NASDAQ Stock Market (NASDAQ) or by way of private agreement up to 5% of RIM's outstanding common shares. The share repurchase program may commence after July 10, 2011 and will remain in place for up to 12 months or until the purchases are completed or the program is terminated by RIM.
The price that RIM will pay for any shares purchased over NASDAQ will be the prevailing market price at the time of purchase. The share repurchase program will be effected in accordance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934, which contains restrictions on the number of shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes of RIM's shares on NASDAQ. Any purchases made by way of private agreement may be at a discount to the prevailing market price at the time of purchase, and would be subject to regulatory approval.
RIM's Board of Directors believes that a share repurchase program at this time is in the best interests of RIM and its shareholders, and will not impact RIM's ability to execute its growth plans. Any shares purchased under the program will increase the proportionate interest of, and may be advantageous to, all remaining shareholders of RIM.
The actual number of shares purchased, the timing of purchases, and the price at which the shares would be bought under the share repurchase program will depend on future market conditions and upon potential alternative uses for cash resources. There is no assurance that any shares will be purchased under the share repurchase program and RIM may elect to suspend or discontinue the program at any time.
Q2 and Full Year 2012 Outlook:
Revenue for the second quarter of fiscal 2012 ending August 27, 2011 is expected to be in the range of $4.2-$4.8 billion. Gross margin percentage for the second quarter is expected to be approximately 39%. Earnings per share for the second quarter are expected to be $0.75-$1.05 diluted, excluding any one-time charges. Earnings per share for the full year fiscal 2012 are now expected to be between $5.25-$6.00 diluted, excluding any one-time charges or share repurchases.
Conference Call and Webcast:
A conference call and live webcast will be held beginning at 5 pm ET, June 16, 2011, which can be accessed by dialing 1-800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the company's Q1 conference call can be accessed after 7 pm ET, June 16, 2011 until midnight ET, June 30, 2011. It can be accessed by dialing 416-640-1917 and entering passcode 4445546#. The conference call will also appear on the RIM website live at 5 pm ET and will be archived at Research In Motion - Investor Events.Last edited by JohnEnglish; 06-16-11 at 03:47 PM.
sg8330 likes this.06-16-11 03:36 PMLike 1 -
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Code:Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in millions except for share and per share amounts) (unaudited) Consolidated Statements of Operations For the three months ended ----------------------------------------------- May 28, February 26, May 29, 2011 2011 2010 --------------------------------------------------------------------------- Revenue $ 4,908 $ 5,556 $ 4,235 Cost of sales 2,752 3,103 2,312 ----------------------------------------------- Gross margin 2,156 2,453 1,923 ----------------------------------------------- Gross margin % 43.9% 44.2% 45.4% Operating expenses Research and development 423 383 288 Selling, marketing and administration 704 705 483 Amortization 132 125 94 ----------------------------------------------- 1,259 1,213 865 ----------------------------------------------- Income from operations 897 1,240 1,058 Investment income, net 7 3 10 ----------------------------------------------- Income before income taxes 904 1,243 1,068 Provision for income taxes 209 309 299 ----------------------------------------------- Net income $ 695 $ 934 $ 769 ----------------------------------------------- ----------------------------------------------- Earnings per share Basic $ 1.33 $ 1.79 $ 1.39 ----------------------------------------------- ----------------------------------------------- Diluted $ 1.33 $ 1.78 $ 1.38 ----------------------------------------------- ----------------------------------------------- Weighted average number of shares outstanding (000's) Basic 523,983 522,764 554,672 Diluted 524,524 524,334 558,189 Total common shares outstanding (000's) 524,112 523,869 552,468 Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in millions) (unaudited) Consolidated Balance Sheets As at ----------------------------------- May 28, February 26, 2011 2011 --------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 1,986 $ 1,791 Short-term investments 403 330 Accounts receivable, net 3,772 3,955 Other receivables 463 324 Inventories 943 618 Other current assets 307 241 Deferred income tax asset 226 229 ----------------------------------- 8,100 7,488 Long-term investments 478 577 Property, plant and equipment, net 2,576 2,504 Intangible assets, net 2,164 1,798 Goodwill 524 508 ----------------------------------- $ 13,842 $ 12,875 ----------------------------------- ----------------------------------- Liabilities Current Accounts payable $ 1,141 $ 832 Accrued liabilities 2,721 2,511 Income taxes payable - 179 Deferred revenue 105 108 ----------------------------------- 3,967 3,630 Deferred income tax liability 256 276 Income taxes payable 31 31 ----------------------------------- 4,254 3,937 ----------------------------------- Shareholders' Equity Capital stock and additional paid-in capital 2,382 2,359 Treasury stock (180) (160) Retained earnings 7,444 6,749 Accumulated other comprehensive loss (58) (10) ----------------------------------- 9,588 8,938 ----------------------------------- $ 13,842 $ 12,875 ----------------------------------- ----------------------------------- Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in millions) (unaudited) Consolidated Statements of Cash Flows For three months ended ---------------------------- May 28, May 29, 2011 2010 ---------------------------------------------------------------------------- Cash flows from operating activities Net income $ 695 $ 769 Adjustments to reconcile net income to net cash provided by operating activities: Amortization 355 186 Deferred income taxes 1 (40) Stock-based compensation 23 16 Other 23 29 Net changes in working capital items (77) 163 ------------------------------ Net cash provided by operating activities 1,020 1,123 ------------------------------ Cash flows from investing activities Acquisition of long-term investments (67) (295) Proceeds on sale or maturity of long-term investments 43 149 Acquisition of property, plant and equipment (222) (226) Acquisition of intangible assets (560) (42) Business acquisitions, net of cash acquired (27) (14) Acquisition of short-term investments (111) (108) Proceeds on sale or maturity of short-term investments 162 150 ------------------------------ Net cash used in investing activities (782) (386) ------------------------------ Cash flows from financing activities Issuance of common shares 7 8 Tax benefits (deficiencies) related to stock- based compensation (1) - Purchase of treasury stock (26) (7) Common shares repurchased - (410) ------------------------------ Net cash used in financing activities (20) (409) ------------------------------ Effect of foreign exchange loss on cash and cash equivalents (23) (29) ------------------------------ Net increase in cash and cash equivalents for the period 195 299 Cash and cash equivalents, beginning of period 1,791 1,551 ------------------------------ Cash and cash equivalents, end of period $ 1,986 $ 1,850 ------------------------------ ------------------------------ May 28, February 26, As at 2011 2011 ---------------------------------------------------------------------------- Cash and cash equivalents $ 1,986 $ 1,791 Short-term investments 403 330 Long-term investments 478 577 ------------------------------ $ 2,867 $ 2,698 ------------------------------ ------------------------------sg8330 likes this.06-16-11 03:38 PMLike 1 -
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Summary (outlook is aweful):
Q1
Revenue: $5.2B (street) � $4.9B (actual)
EPS: $1.32 (street) � $1.33 (actual)
Shipments: 13.5M (street) � 13.2M (actual)
ASPs: $283 (street) �
PlayBook: 400k (street) � 500K shipped (actual)
Margins: 41.4% (street) � 43.9% (actual)
Q2 Guidance:
Revenue: $5.5B (street) � $4.2 to $4.8B (actual)
EPS: $1.40 (street) � $0.75 to $1.05 (actual)
Shipments: 14.0M (street) -
ASPs: $282 (street) �
PlayBook: 700k (street) �
Margins: 40.7% (street) � 39% (actual)
FY Guidance: $6.28 (street) - $5.25 to $6.00 (actual)Last edited by MarketRide; 06-16-11 at 03:48 PM. Reason: updated numbers
06-16-11 03:43 PMLike 0 -
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Hmmm. Not great. What amazes me is they are going to cut jobs, even though they can't get products to market in a timely manor... They say its streamlining... Looks like there is a lot of dead weight up there in Waterloo! Hopefully the end result will be a company that is quicker on its feet and becomes more active and less reactive. I still think some major changes are needed at the top of the bloated beast, but those are usually the last to occur.06-16-11 03:45 PMLike 0 -
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What RIM needs to do is explain to the street what they are going to do to turn things around. They said they're cutting staff and accelerating new product launches but the street will want to hear more details.06-16-11 03:46 PMLike 0 -
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sleepngbearRetired ModeratorThey've already made their immediate plans abundantly clear: new devices to start being introduced late August. What they need to further clarify is exactly how this 'streamlining' (read: contributions to the unemployment rolls) is going to expedite getting new products to market. The real question I think we all need answered is why has it taken all this time to realize and do something about the fact that they take too damn long getting new products to market.
Stock gonna drop at lest another $2 by this time tomorrow. Don't buy just yet...
Posted from my CrackBerry at wapforums.crackberry.com06-16-11 03:56 PMLike 0 -
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I think what people will want to hear is clarification on how they're going to do this and if their plan seems reasonable. And yes, stock if going to drop a few bucks tomorrow at opening so don't buy just yet.They've already made their immediate plans abundantly clear: new devices to start being introduced late August. What they need to further clarify is exactly how this 'streamlining' (read: contributions to the unemployment rolls) is going to expedite getting new products to market. The real question I think we all need answered is why has it taken all this time to realize and do something about the fact that they take too damn long getting new products to market.
Stock gonna drop at lest another $2 by this time tomorrow. Don't buy just yet...
Posted from my CrackBerry at wapforums.crackberry.com06-16-11 03:59 PMLike 0 -
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Just so we're clear, RIM sold 2 million more handheld devices this last quarter than the same quarter last year (13.2 million vs 11.2 million). They also "shipped" 500K PlayBooks in its first half-quarter. Their revenue is up $650 million from the same quarter last year.
And yet their net income is $70 million less than it was during the same quarter last year.06-16-11 04:08 PMLike 0 -
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The problem is that even up till now (not including the recent drop) the reaction has been based on absolute panic, not necessarily any kind of reality at all.
So there is no real bottom imo... Which makes it potentially a good risk, but also insanely unstable and unreliable....
It's like every quarter the sky is falling all over again.06-16-11 04:46 PMLike 0 -
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Here are analysts comments:
COLIN GILLIS, ANALYST, BGC PARTNERS, NEW YORK
“The company is going into the abyss of a transition, and even if they get a new model, it’s a new model on the old platform. Unfortunately, they already gave us the roadmap, with QNX being their entry back into the high end of the market, and that’s 2012.
“So while the new Bold certainly looks nice, it certainly doesn’t seem like it’s going to be coming any time in the middle of the summer, maybe before the end of the summer which is the end of September. It’s not going to impact next quarter, and it’s clear that’s reflected in next quarter’s guidance.”
“We’ve got to hear that they can execute. One of two things: either that they can execute on the QNX platform to be competitive on higher end, or that they’re able to adjust their business model to survive in the middle part of the market.”
JEFFREY FIDACARO, ANALYST, SUSQUEHANNA FINANCIAL
“Our bearish low industry estimates were not conservative enough,” he said citing a disappointing August quarter and full year guidance.
“I have to get more color from the call. There’s been some delay in the ramp of new products. They’re losing share in the meantime because of this void.”
“You’re seeing increased competition internationally hurting (average selling prices) and gross margins. They’re feeling that a little more acutely than most.”
He said that Playbook sales appeared good if the sales number reflected consumer demand rather than sales to retailers.
SHAW WU, ANALYST, STERNE AGEE
“The guidance was surprisingly weak. Many expected some kind of reset, but it looks like they are doing a fairly big reset. But on the flip side it’s actually good that they are setting expectations more realistically.”
PETER MISEK, MANAGING DIRECTOR, JEFFERIES & CO, NEW YORK
“The guidance was just awful. The devices are receiving less shelf space and less support from carriers.”
While Misek said that Playbook sales for the first quarter were pretty good, he was disappointed by handset sales. His key question for the company is when it will launch QNX phones.
“People are not waiting. They’re going to other platforms,” he said. “I would expect there’s going to be significant layoffs. This is not good. This is not good.”06-16-11 05:18 PMLike 0 -
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I felt that the biggest lining was the PlayBook, which sold 500,000 units in Q1, beating consensus expectations of 350,000. Thus, the PlayBook is on pace to sell 4 million units in calendar 2011. My full article is here: Investing Blog: The Biggest Silver Lining in RIM's Q1 Results06-16-11 05:21 PMLike 0 -
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It didn't sell 500,000 units. They SHIPPED 500,000 units. When they got pressed for actual units sold, they skirted, double talked, and didn't answer by saying that they "didn't have an actual number".I felt that the biggest lining was the PlayBook, which sold 500,000 units in Q1, beating consensus expectations of 350,000. Thus, the PlayBook is on pace to sell 4 million units in calendar 2011. My full article is here: Investing Blog: The Biggest Silver Lining in RIM's Q1 Results
That's not 500,000. I have a suspicion that's not even 250,000 sold.
From the live blog:
If you put in your blog that they SOLD 500,000 units, I would edit it so that the accurate information is reflected.Chris Umiastowski: Jim just said they don't have specific numbers on PB sell thru. Why not? Don't they automatically update software? Shouldn't they know?
5:32 Kevin Michaluk: That means 500k shipped, under 200k sold in my book.
5:32 Chris Umiastowski: I hope Mike comes onto EVERY call from now on.
5:33 Kevin Michaluk: haha.. if RIM truly "doesn't have specific numbers on playbook sales" then.. well...
5:33 Kevin Michaluk: They just didn't want to release them.Last edited by reeneebob; 06-16-11 at 05:35 PM.
06-16-11 05:26 PMLike 0 -
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Time to short RIM and short it big. Only going to get worse. People are moving into 2011 and out of 2001.06-16-11 06:52 PMLike 0 -
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+1 Don't let the door hit ya where the good Lord split ya!Last edited by lnichols; 06-16-11 at 07:37 PM.
anon(73368) likes this.06-16-11 07:35 PMLike 1 -
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Sell-in was 500,000. And yes, you can use the word "shipped" as well. And sell-through can be a different number. RIM considers the carriers as customers also, so it is also correct to consider that they sold their units to the carriers. Keep in mind you don't directly buy PlayBooks from RIM, but you actually buy them from the carrier. Anyways that was not what I was emphasizing in the article, only that 500,000 was higher than consensus estimates of about 350,000. I may take a look at sell-through in a future article, when I have more time.It didn't sell 500,000 units. They SHIPPED 500,000 units. When they got pressed for actual units sold, they skirted, double talked, and didn't answer by saying that they "didn't have an actual number".
That's not 500,000. I have a suspicion that's not even 250,000 sold.
From the live blog:
If you put in your blog that they SOLD 500,000 units, I would edit it so that the accurate information is reflected.
Here's what Dow Jones said: "...if there is a silver lining it could be sales of its PlayBook tablet in 1Q, which came in around 500,000...": DJ MARKET TALK: Research In Motion 1Q PlayBook Sales Encouraging
At the end of the day RIM just has a lot of haters, including those who would insist on using a guess of 250,000 just so that it is lower than 500,000.06-16-11 07:40 PMLike 0 -
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So you are calling Kevin a hater too? Even he said the same thing.
Nice.
Again:
Yep, Crackberry Kevin is a hater.5:32 Kevin Michaluk: That means 500k shipped, under 200k sold in my book.
5:33 Kevin Michaluk: haha.. if RIM truly "doesn't have specific numbers on playbook sales" then.. well...
5:33 Kevin Michaluk: They just didn't want to release them.Last edited by reeneebob; 06-16-11 at 07:45 PM.
06-16-11 07:43 PMLike 0 -
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Why do you care? Your estimate is obviously low because you want to incite. But why? Why are you even here? I think Kevin is off a good bit by the way but I thought he was off with the super bowl thing too. You unfortunately probably know what I'm talking about...because, you are still here.06-16-11 07:49 PMLike 0
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