Press Release: Research In Motion Provides Updated Q1 Guidance

By Kevin Michaluk on 28 Apr 2011 05:17 pm EDT
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RIM

At the close of the markets today RIM fired off a press release letting investors know they've adjusted their forecasted revenue down from the guidance provided last quarter. The drop is due to less phone sales than expected, with a bigger portion of the sales mix coming from lower end phones than expected. The press release is below to read, but if you're by the computer at 5:30pm EDT you can jump on the live webcast to hear RIM talk about the numbers (I'm curious to see if they have anything to say about the PlayBook launch). 

Press Release

Research In Motion Provides Updated Q1 Guidance

WATERLOO, ONTARIO--(Marketwire - April 28, 2011) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM) today provided an update on its financial guidance for the first quarter of fiscal 2012 ending May 28, 2011 (all figures in U.S. dollars and U.S. GAAP).

RIM now expects fully diluted earnings per share for Q1 to be in the range of $1.30-$1.37, lower than the range of $1.47-$1.55 previously forecasted by RIM on March 24, 2011. This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecasted in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices. Gross margin for the first quarter is expected to be similar to the 41.5% previously guided. This mix shift is also expected to result in revenue that is slightly below the range of $5.2-5.6 billion guided on March 24. Expected shipments of BlackBerry PlayBook in the quarter continue to be in line with our previous expectations and we have not experienced any significant supply disruptions in Q1 due to the impact of the Japan earthquake.

RIM expects to achieve full year fully diluted earnings per share of approximately $7.50, which reflects anticipated strong revenue growth in the third and fourth quarters of the fiscal year driven primarily by the launches of new BlackBerry smartphone products and prudent cost management.

RIM will be holding a conference call and webcast at 5:30 pm today to discuss today's announcement, which can be accessed by dialing 1-877-941-1467 (North America), 480-629-9676 (outside North America). The replay of the company's conference call can be accessed after 7 pm ET, April 28, 2011 until midnight ET, May 12, 2011. It can be accessed by dialing 416-640-1917 and entering passcode 4437776#. The conference call will also appear on the RIM website live at 5:30 pm ET and will be archived at http://www.rim.com/investors/events/index.shtml.

27 comments

shlammed

I mean, the current lineup is getting very old. This quarter is pretty much a write off. The fact that they're still turning a profit with this lineup when companies like Motorolla are struggling is impressive.

Here's to looking forward to Q2 and all the goodies it will bring :)

WillieLee

They haven't released anything since October and some devices aren't hitting major carriers. Verizon hasn't had a device other than the Curve for a year. RIM's desire to get into emerging markets seems to have distracted them from the countries that have subsidies.

I'm sure the year-end guidance of $7.50 EPS is a signal that they are planning another share buyback as soon as they are allowed to but this should be a signal to the company that they need to work on their ability to develop products and get them to market.

Coachbulldog

I'm a Verizon customer and I hope RIM brings some new phones to VZW soon. At some point I would think RIM would want to release something for customers like me who are loyal to BlackBerry but are growing tired of our old phones.

WillieLee

There is no reason why Verizon shouldn't be getting the BlackBerry Touch and Bold Touch. They need to return to Verizon in a big way.

BBOttawa

Just listened to the call, Jim said they are introducing all the big news on Monday, and the integration between Blackberry 7 and the Playbook due to their infrastructure will be something you perhaps have not thought of yet. I'm betting it's SMS and answering calls when bridged.

In reality this isn't a shock, there product line is ancient, the torch was introduced 9 months ago, other than the niche Style, they haven't had another "real" new phone since the Bold 9700 in 18 months (the 9780 was a small refresh only). Unacceptable in the smarphone market. The shock is that they're still selling what they are in North America.

WillieLee

Hopefully the downgrade will spur Mr. Balsillie to actually discuss the products in great detail rather than the standard "Just wait and see" that he uses in the earnings calls.

And you're right, it is impressive that they will still sell 13.5 million devices on an old product line. But if they don't see the orders for the new phones, it could be trouble.

tumer

well you know what this means tommorrow this stock gets killed i guarantee a 8-10% decline tommorrow morning

tumer

it allready started after hours decline of 12%

mpscan

Stock price down 15% in after hours. Want new devices and brand new software? Hang in there folks, six more months of this and the shareholders will get Mr. Balsillie's resignation - then perhaps they can get someone in there who's actually living in 2011 and isn't so damned arrogant he's tanking his own company.

esbuenodun

We're talking resignation already huh? Lol CALM DOWN! EVERYBODY JUST CALM DOWN! BREATHE...... OKAY! Now say everybody saw it with me, we're okay. We're gonna be okay.....

br14

@mpscan - hate to say it but I think you may have a point. Jim Balsillie seems to be a liability. He has presided over an explosion in administrative costs, without the returns in terms of organizational effectiveness that increase in spend should provide.

The truth is RIM has focussed so heavily on its Playbook device that it failed to realise the implications of its strategic change, and failed to prepare for the effect.

Telling everyone you're about to implement QNX on all your smartphone range is effectively telling them your current products are not good enough.

And they've effectively told all of their current Java development community that they're now second class citizens.

Why should I develop an app for BlackBerry if it's not going to be able to run on future devices? And "player" or otherwise thats the message.

Their strategy is a disaster PR wise - even if technically it's brilliant.

They have to stop trying to placate the idiots that write analysis pieces and start focussing on protecting their actual markets.

rocmon

BR14, brilliant assessment... would you like the job at the helm?

Kiddo2050

Well maybe they needed this wake up call, but honestly I think they knew it. This reminds me of the insider talks we heard about a while back, they just cant keep letting deadlines slide by.

I hope there are some big announcements next week, signs they are getting back on track, but not announcing the sexy full screen smart phone doesn't seem good. I hope that rumor is wrong even though that isn't the phone I want.

To the poster above, I do think needed to move to a new OS, they couldn't stay with what they had and compete. People don't accept battery pulls anymore. I like the OS on my playbook a lot.

Pete6

I am SO diapointed in RIM. I have been a loyal customer for years. I have waited since OS 4.1 for real change and it has not come.

Now the PlayBook has been released with zero marketing and in an unfinished product.

Shame on you RIM.

OS 7 will need to be a paradigm shift if it is to save this company. I hope it works but with RIM's useless marketing and worse lack of marketing research, I doubt it.

Kiddo2050

You obviously don't own a playbook. Great product. No apps for the iPad on day one either, Stop being a stupid unrealistic craybaby.

The playbook basically sold out without marketing, so you want the company to waste money just to make you feel good??

gjohnson83

Actually, the iPad had 3,500 iPad-specific apps at launch last year (April 3rd). I'm not saying this to hate against the PlayBook, which I think is a great RIM product; I'm just keeping things factual.

Thumbtyper

Why is it that apple can tell exactly how many corporations that have bought or are testing devices, yet baldsillie cant and just keeps telling people good news is coming later? He instills no confidence in the market.

lnichols

I'll buy 4 phones RIM this summer if you get something out that is good. I've been waiting to get rid of this god awful Tour for too long. Please accelerate the Monaco/Monza and Bold Touch rollouts!

mciriello

Not good. There is certainly some product in the pipeline but this quarter is really a weak one. I think the biggest issue with RIM right now is the fact that they put so many resources into the Playbook, which I have always said is doomed to failure, and yet despite those resources, they still released a half-baked product that can't even do email well.

They need to turn their attention to the new handhelds FAST. The Torch 2 and all the new touchscreen phones, and BB7, had better be huge hits or RIM is really in trouble.

Kiddo2050

Playbook, which I have always said is doomed to failure,

Well I guess you are an idiot then. Haven't you heard report of increased production??? Like 100% ramp up?? God why do I bother....

br14

"they still released a half-baked product that can't even do email well"

Don't repeat the garbage you read from analysts.

If you have a BlackBerry the Playbook is FANTASTIC for email.

IT HASN'T GOT AN EMAIL CLIENT BECAUSE IT"S CORE CUSTOMERS (enterprise) DON'T WANT AN EMAIL CLIENT.

When they release the wireless versions no doubt it will have an email client.

Does anyone really believe that a multi-billion dollar company with literally thousands of developers on staff couldn't have built an email client if they wanted to?

And by the way, the Playbook is an amazing product and perfect for its target market. The fact RIM failed to market the device appropriately is the issue.

Kiddo2050

Right on brother, I love my playbook.

I don't think they failed on marketing either considering the sales. The only error was sending demo units to a bunch of iPad fan boys like Walt Mossberg (old man).

HAve read several positive reviews since the early one. They still note few apps but also balance it with how f-ing great this device is.

Commie Canuck

I love these comments, "my Playbook is gonna be awesome one day".

The device is supposed to tether through a BB now- so where is the email client?

"Does anyone really believe that a multi-billion dollar company with literally thousands of developers on staff couldn't have built an email client if they wanted to?"

But they didn't, and they couldn't, could they? from what I read, the tethering barely works, or not at all.

Sorry, but RIM is behaving like Nokia, they simply need to get the job done better, but the Playbook is one dropped ball.

kirkk

This argument that RIM will be fine because they're the "Enterprise" solution is complete BS. I'm a messaging consultant and work with enterprise-sized companies every day. In just the last year I've seen over a dozen of my enterprise clients that were strictly BES shops start offering employees Android and iOS devices (both iPhones and iPads). I was just talking to one this week that started offering Android connectivity when the EVO 4G was released and started offering iPhone support when it came out on Verizon (they only offer company phones via Sprint and Verizon). He told me that since they've started offering a choice less than 30% of users are going with a Blackberry and that number is still falling... the other 70%+ are going with an almost 50/50 split of Android and iPhone.

Anyone who thinks that RIM will be safe because Android and iOS devices are still seen by enterprise customers as "toys" that don't offer a credible alternative to a BES solution is delusional.

For RIM to release a half-baked product like the Playbook and then fall back on the tired argument of "that's what our core customers want" when those "core" customers are already moving away from them in droves is just insane.

CreativTech

Nobody should be overly surprised with this. The Playbook was rushed to market, and the current line of smartphones were already outdated when they hit the shelves. They're consistently behind the curve hardware-wise. Sure it has a rock-solid OS, but if it groans under the load of just a few apps, it doesn't really matter.

Commie Canuck

"Updated Q1 Guidance" is Canadian for, "losing money".

Gamesdmc3

These new blackberry smartphones coming out should get them back on track