Press Release: Research In Motion Reports First Quarter Fiscal 2012 Results and Revises Full Year Guidance

By Kevin Michaluk on 16 Jun 2011 04:40 pm
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Research In Motion

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Press Release

Research In Motion Reports First Quarter Fiscal 2012 Results and Revises Full Year Guidance

Announces Plans to Streamline Operations and Accelerate New Product Introductions

Board of Directors Approves Share Repurchase Program

WATERLOO, ONTARIO--(Marketwire - June 16, 2011) - 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 revenue1 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 http://www.rim.com/investors/events/index.shtml.

Kevin Michaluk Kevin Michaluk "Founder, Editor in Chief " 3922 (articles) 3285 (forum posts)
39 comments

Cowchip

In other words, the ship is sinking.

jpoulin587

They have almost $3 bil in the bank. With that kind of cash, they will be around a long while.

squire

I said those exact words in a post in the forums back in Feb. 2011 and got blasted. Looking like I was right!

Ebscer

approximately 500,000 tablets is slightly higher then expected...

glinc

Shipped numbers are very different from actual sales numbers.

Cowchip

Apparently not high enough to prevent layoffs...

r0ssrg

I hardly think your comment is 100% valid. While the cynic would believe that layoffs mean the ship is sinking. I take it another way.

Businesses who have been around as long as RIM will build up departments that are no longer as valuable as before and no longer fit the new direction the company is making. While some people can be relocated to fit the new direction it is natural that some peoples skill sets will simply not suit new requirements.

RIM gets hammered for not changing fast enough and when it makes changes so it can, it still gets reactions like that.

Don't see it how you can have it both ways.

big_time2

I think we'll have to wait and see what kind of layoffs before we can say ship is sinking.

What you described is perfectly fine, and it happens all the time, however those layoffs don't get announced on earnings calls or get press releases. Layoffs like that usually affect several different departments and each department consists of several employees. I'd say 45-60 associates is no big deal. However, if they lay off something like 682 people and only small percentage of them can be relocated to other offices/positions then the ship is sinking.

Cowchip

Open up your eyes and look at the big picture. RIM is lagging so far behind the others in this sector that it isn't even funny, and they haven't done anything to show they are trying to keep up.

RIM...the new Palm.

Signed,
An embarrassed shareholder

nomi1978

Layoffs are part of any business unfortunately. But I knew the layoffs would come eventually at RIM. They were a small company and grew too quickly. The way they operate at the moment is less than optimal.

There are numerous people doing the same job and then they realize oops we forgot xyz. This will possibly get them more focused and get rid of the redundancy. And as Jim stated get people more focused and ensure optimal delivery.

nomi1978

Layoffs are part of any business unfortunately. But I knew the layoffs would come eventually at RIM. They were a small company and grew too quickly. The way they operate at the moment is less than optimal.

There are numerous people doing the same job and then they realize oops we forgot xyz. This will possibly get them more focused and get rid of the redundancy. And as Jim stated get people more focused and ensure optimal delivery.

nomi1978

Layoffs are part of any business unfortunately. But I knew the layoffs would come eventually at RIM. They were a small company and grew too quickly. The way they operate at the moment is less than optimal.

There are numerous people doing the same job and then they realize oops we forgot xyz. This will possibly get them more focused and get rid of the redundancy. And as Jim stated get people more focused and ensure optimal delivery.

mutambo

mutambo is glad he got out of dis pieze of shetz last year. this stock is a dump. this company is a dump. i cant think of a worse company performing right now than the shmuckz at RIMMJOB.

they need to fire a lot of people who are not performing, starting from the top.

thank god i havent touched this junk since last year, i got out at $54 bucks and never looked back on this P0S, jesus told me to get out and lorda mercey thank god i did

Kiddo2050

$54 what a loser you are. I wouldn't be bragging about that. At $54 you missed it by a mile a-hole.

mutambo

from 49 to 54 is not bad, i shall take profit like this, i bought in for a quick swing in october last year and made good, didnt think it would go all the way to 70. but all is okay my jews, i have still profited. pigs get slaughtered, atleast mutambo is not loozing moneyz$$$

i am not the onez stuck holding poop at 30 a share. HAR HA RHAR

Kiddo2050

Neither am I, I'm not stupid enough to buy shares in a company just because I like their product.

mutambo

well said. most people fail to realize that just bc they enjoy a product doesnt mean everyone else does. them enjoying a product blindsides people, and thats probably why many on crackberry are holding $30 poop turds tonight

estarno

Looks like the beginning of the end, or a very very dark period for RIM. Can't keep its head above water with the competition.

http://money.cnn.com/2011/06/16/technology/rim_earnings_q1/index.htm?sou...

Cula

After Hours: 30.65 Down 5.02 (14.21%)

Kiddo2050

My phone still works. Given that, I don't give a flying F. In fact I think it's good they get their asses kicked, only good can come of it, and if not I buy another phone, whoop dee do!

ODAAT

Thanks. Your comment is the funniest and sanest thing I have read on this site for months. Let's have some perspective- lives aren't in danger here.

Layser

haha well played sir...my playbook and my blackberry rock if that changes i will another brand but im not worried...i never buy shares in products i love lol

Maestrodog

I've loved RIM, but given the issues on the phone side, the analysts, reviews and competitive landscape, the PlayBook had to be just about a home run.

As we've seen, whatever hardware strengths the device has, it is far, far from being ready for enterprise and has no chance of being top choice amongst consumers.

They needed to ensure a bigger first impact, and this could have been achieved with some rather rudimentary adjustments to the OS, a semblance of a foundation on the application side in a few key categories, and more sensible, effective marketing.

All this could have been achieved with a seasoned and mature plan.

They've fallen short and are going to continue to have a very tough time.

Layoffs very typically solve nothing, add work to the survivors, breed distrust, and both generate brain drain and prevent talent from coming on board. RIM pollyannas brushing this news off are really showing their colors. Layoffs are always a bad sign, whatever short term effect they might make on the bottom line reporting to Wall Street, they bleed the soul and usher in new ages of calcification. Likely RIM needs more talent, not less, but is desperate to fight the share price fight.

Putting shares before the mission is another death knell, especially in tech. RIM's only hope is to have definitive products and service. If laying off loyal employees is an essential part of achieving that, I but wish them godspeed, but in no way would I buy a share--or a new phone or tablet anytime soon at all.

Kiddo2050

Hey bud, who cares? If you own shares I'm sorry for you if you don't why bother with the hand wringing?

your not going to buy a phone because the earnings are down???? You buy a product based on a company's quarterly earnings. I buy the phone because I like the way it works.

What TV do you have in your home? Do you know what the quarterly earnings of that company were last quarter??? Do you care??? Let me tell you if it was a Sony you've got one f-ing nice TV but the company ain't doing so well.

honestly the whole cell phone thing has gotten out of control. I cannot see anyone on earth saying Damn that Sony they made less money than I thought last quater, its out with my Sony TV and in with a Samsung!!!!

Maestrodog

I don't own shares, nor would I buy any.

An investment in a phone or Playbook and the applications that go on it is a more personal, daily use that includes enterprise readiness and effectiveness.

Switching to a new brand of phone is a hassle very much in time and quite possibly in expense that pales completely compared to grabbing a new i'diot box and plugging it in.

I don't use a teevee very often, nor do I invest personal information and money on applications to run on it.

Very, very weak comparison, Bud.

The fact that my friends with the new Torch are livid at RIM isn't helping either.

The reason I don't buy another Blackberry or Playbook is because I don't think the development and support are necessarily going to remain competitive because the money won't be coming in and the layoffs will add insult to injury.

That's a problem with information systems, not mass produced non-interactive entertainment products.

Back to class, Bud.

P.S.

The word is spelled "you're" and not "your" -- but who cares, right?

1magine

They don't call it RIM for nothing.

Jamma3

This is worse than I than I thought...should have seen the coming when the only had one phone to announce and still don't know when it will launch. I'm a big fan of RIM but this is starting to look like another phone I had before coming to BB it's call Palm. Delay after delay and when they came out with a phone most people left Palm including myself.
By the time they get QNX on their phone it will be way behind and iphone 5 and 6 looking to launch and RIM will still stuck to old hardware even when the competition is way ahead they won't change the hardware and still launch phones a year or two behind in specs.
I'm still waiting for Storm 3 and had to settle for the torch as stop gap. When it does launch specs will be outdated.
Never thought I would say this but I'm going to wait and see how the company is looking before wasting money on another phone that may end up like Palm.
Don't know if they said when the Bold touch will launch I got too depress to read everything but if there is still no date then RIM is really in trouble.

Nuff said

mutambo

i was never an apphle fanboi, but if rimjob comes out with this nonsense monaco and it is feces i am not going to waste my money on it, they will really need to get me to cling onto BB otherwise i may jump ti iphone. i never even considered iphone but i am not begining to start to done did is i am are considering the IPHONE!!!!!!!

Batteman87

I was BB for years until they decided not to up the ante while everyone elses did... Glad I did I LOVE my iPhone 4... just a little advice, wait for iPhone 5 to drop or iPhone 4s maybe. Most likely with the new iOS5 which is AWESOME! Sorry RIM.... I was hardcore until you stopped caring about keeping up. It's like Atari VS XBOX 360 and PS3

Scroat

How can people not see this as anything but bad for RIM??!! The smartphone market is growing every day but RIM sees fit to lay people off? Clearly RIM is getting a smaller and smaller piece of a growing pie. Employees get laid off every day but when a company announces layoffs that means the big axe is falling.

jkrist

This, my friends, is the swan song for RIM. The End.

jpoulin587

I dont think a lot of people on this board know how business works. Yes, RIM has a lot of improvements to make but they made almost $700 mil last quarter and have almost $3 BILLION in the bank. How many companies have that kind of cash laying around. And they have no debt.

They have lots of breathing room to fix their problems and recover.

jkrist

@jpoulin587,
A company that does not innovate according to market demands might as well have double that amount in their bank and still go down.
Additionally, one factor that makes organizations move in the right direction is employee morale. The morning after RIM announced these results a friend of mine at RIM had her LinkedIn profile update with a new connection: a recruiter.
When your employees have this little faith in you you ca rest assured that the end is near.

DrewDT

Sigh, I think one thing that RIM really needs is more support for and from developers. Every hobby or interest I have I always see apps available for the iPhone or Android, rarely if ever BB. If there isn't third party support for a product, it is doomed.

mutambo

H0LY SM0KES BL0W ME TIMBER! STOCK DOWN 23% !! GOOD LORDA MERCEY!

rewd

Some of you fanbois are absolutely hilarious. Trying to defend RIM and saying these layoffs are nothing or "just a part of business". Yea, they are part of a business that's FAILING. Do you see Apple laying anyone off?

Come on, get real. The writing was ALL over the wall at CES this past year. Am I the only one that saw it? Android debuts nothing short of 4 or 5 4G phones on multiple carriers at CES (dual cores, HD graphics, high end video games, laptop docks, etc etc etc..) and the one and ONLY thing RIM has to show is this lameass "Playbook" nonsense. It was almost as if this company saw how bad they were lagging behind the competition, gave up and were TRYING to railroad themselves with this terrible showing.

So this ship is, in fact, sinking. If you can't see it you need to wake up and smell the lifeboats.