1. Homo Erectus's Avatar
    RIM has posted its third quarter fiscal 2013 results and, while still trending downwards, immediate concern for the company’s long-term health has been somewhat assuaged. This is the last quarter without a new handset, though the newly-leaked BlackBerry Z10 could launch close to the end of the company’s fourth quarter.

    Revenue was down 5% from the previous quarter to $2.7 billion (all numbers CDN), and down nearly 50% from a year ago, when revenue was a relatively flush $5.2 billion. The company posted a net loss of $114 million, or 22c per share, which was significantly lower than its $235 net loss from last quarter. In other words, the bleeding has slowed but not stopped.

    The company plans to invest heavily in marketing in the coming quarter, with high expectations for its BlackBerry 10 launch on January 30th. The first handsets are planned for sometime in February, though specific dates are not yet known.

    RIM’s subscriber base now sits at 79 million, down over a million from the previous quarter. Though specific numbers have not been provided, the net loss is likely due to continued purging of the BlackBerry platform in North America, with significant gains in Africa and the Middle East. The company sold 6.9 million smartphones and 255,000 PlayBooks this quarter; that’s 500,000 fewer smartphones and 125,000 more tablets compared to last quarter.

    RIM’s cash balance has increased to $2.9 billion this quarter as it continues to iterate on its Cost Optimization and Resource Efficiency (“CORE”) program. Although the company expects another net loss in Q4, CEO Thorsten Heins is bullish on the BlackBerry 10 launch. “More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products,” he said in a statement.

    As in previous quarters, good and bad news in equal measure for RIM. Are you bullish on the company’s future?
    Ben1232 likes this.
    12-20-12 06:09 PM
  2. TRlPPlN's Avatar
    Long on RIM for me. Buy now and its up to you to short them or not. I've been buying as long as its been under 15 dollars.
    12-20-12 06:15 PM
  3. TomJasper's Avatar
    Long but totally disgusted with who ever dumped over 11 million shares in after market trading after peak of $15.50 in after market trading. News went out every where over the wires in regards to RIM beating estimates and the after hours jump.

    Somebody with VERY deep pockets then floods the highs with over 11 million shares,WTF. Most ordinary people don't trade after hours, so question WHO dumped and their motivation. So pizzed!
    Acumenight likes this.
    12-20-12 06:29 PM
  4. pooger's Avatar
    Long but totally disgusted with who ever dumped over 11 million shares in after market trading after peak of $15.50 in after market trading. News went out every where over the wires in regards to RIM beating estimates and the after hours jump.

    Somebody with VERY deep pockets then floods the highs with over 11 million shares,WTF. Most ordinary people don't trade after hours, so question WHO dumped and their motivation. So pizzed!
    That was me. I got tired of making money. *yawn*

    j/k j/k
    12-20-12 06:45 PM
  5. pooger's Avatar
    Are you sure it's 11 million? From the charts on google it looks like maybe 2-3 mil at most during the aftermarket "crash"
    12-20-12 06:47 PM
  6. Goint's Avatar
    I love it. June options are now half price.
    12-21-12 08:53 AM
  7. shabbs's Avatar
    Long but totally disgusted with who ever dumped over 11 million shares in after market trading after peak of $15.50 in after market trading. News went out every where over the wires in regards to RIM beating estimates and the after hours jump.

    Somebody with VERY deep pockets then floods the highs with over 11 million shares,WTF. Most ordinary people don't trade after hours, so question WHO dumped and their motivation. So pizzed!
    They're looking pretty brilliant right now... stock off to a very bad start today... down nearly 18% already.
    12-21-12 08:55 AM
  8. TomJasper's Avatar
    The Market Ticker ® - Commentary on The Capital Markets
    Posted 2012-12-21 09:49
    by Karl Denninger
    in Company Specific

    RIMM Selloff: Justified?
    *
    RIMM is getting plastered this morning, although it should be noted that the stock has still nearly doubled from where it was just a few months ago.

    The CEO was on CNBC this morning to discuss the quarterly results, and the comment that appears to have caused the sell-off last night was a note that the services model is evolving from a flat per-user fee to one that reflects the services that individual subscribers use.

    The question that many analysts appear to be panning the company on is whether this will trash the firm's service revenue.

    But those who are going there with this opinion didn't listen to what the firm's CEO said on the call, which I listened to, or for that matter this morning: The company has already begun implementing this change.

    Why is this important?* Because the consequences of the change are already showing up in the firm's economic results.* And those results are rather interesting, particularly in margins.

    That was one of the biggest shockers to me in the report: Margins increased.

    How's that possible, when the product mix does not have any of the new phones in it as of yet, and the subscriber count went down?

    That's simple: The revenue model company-wide is generating more margin than it was before.

    You want to short a company's stock that is improving margins by making changes in their service model and is about to roll new product that will have a better margin than their legacy devices?*

    Are you nuts?

    What sort of analysis are you doing out there?* Hardware margins aren't improving when you have a legacy product that has its sales volume falling off and incentives are*being used to keep the pipeline moving in anticipation of the new product launch!*

    Heins looked at the CNBC people like they were idiots this morning in his interview, and with good reason.* He's already implemented the service model change in large part that he was talking about (and he said so quite-clearly)*and it not only produced $600 million in additional balance sheet cash it also improved operating margins.

    Now you can pan the company for how it generated the increased balance-sheet cash if you wish but you can't argue with margin improvements.* There are two things that tell you more than anything else about the forward prospects of a company: Cash and margins.* If both are going the right direction you're doing it right.

    There are times when you have to look at the way the market "reacts" to something and conclude that what's really going on is not an attempt to have an interview and interpret results but rather to defend previous calls that have been ridiculously late and thus not only aren't actionable they do demonstrable harm.* Many analysts were outrageously late in turning bearish on the stock as it started to slide a few years ago, and now they're steadfastly sticking to their call that the company is going under, even though their predictions that (1) the firm would not launch in January and (2) RIMM would run out of cash and customers before it got the new phones to market have both been conclusively disproved.

    This marks two quarters sequentially that the company has been able to boost cash on the balance sheet and this quarter they improved margins as well.* Further, Heins said that while he expects to spend a lot of money promoting the launch (of course) he also does not expect cash on the balance sheet to fall under $2 billion; once again destroying the premise that these analysts have proceeded from where the firm would simply blow all it's money and be unable to complete their roll-out.

    Cramer is "again" claiming that "everything is bad."* Nonsense; the fee structure change already took place, if you bothered to listen to Heins, and yet the company is able to sell through at a better margin.* If this was a disaster as Cramer and the others are saying margins would be collapsing; they are instead improving!

    Folks, read*the damned report.* Companies with building cash levels and improving margins do not go bankrupt.* They succeed.

    When I started hammering on the company to "Break the Glass" I simply did not believe that RIMM could do this -- build cash and improve margins -- without doing something really outrageous such as fully-opening the platform to GAPPS (allowing unbridled Android application loads.)*

    I was wrong; the company is improving margins and is building cash levels and the new phones are not yet on the market!

    Can RIMM blow it all to **** and go down the toilet?* Sure.* The firm's situation is incredibly dynamic at the present time and there is never a guarantee of success.* However, reality on the ground today is that (1) the company is building cash levels and is comfortably able to support the BB10 introduction, (2) margins are improving, not declining, and on the new devices margins will be even better since they're "newest generation", (3) subscriber counts are reasonably stable with the firm having almost 80 million potential converts to BB10 (and if 30-40% of them DO convert within a year or so*the firm will hit a Grand Slam homer), (4) carrier feedback thus far is uniformly positive with carriers willing to co-market, push the devices and spend to support the roll-out and (5) the service subscription model has already been modified and will continue to be -- but rather than trash margins it improved them.

    The best opportunities come when the "herd" has their head up their back side and is all on one side of the trade trying to defend a previously-held position and either intentionally overlooks facts or starts making things up out of whole cloth despite contrary evidence right under their nose.

    This is one of those times.

    Disclosure: The author is actively playing in this one and given the volatility can't commit to any particular position in the firm or options on it at any given instant in time.
    TRlPPlN likes this.
    12-21-12 01:20 PM

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