Press Release: Research In Motion Reports Q1 Results for Fiscal 2013 - BlackBerry 10 phones delayed until Q1 2013

Thorstein Heins
By Adam Zeis on 28 Jun 2012 04:23 pm EDT
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Research In Motion has just reported their results for the first quarter of the 2013 fiscal year. We kind of knew what to expect after a business update was issued only a month ago, but it will be interesting to hear what RIM CEO Thorstein Heins has to say during the conference call. The CORE (cost optimization and resource efficiency) program still aims to save $1 billion by the end of fiscal 2013. RIM has faced a few challenges over the last few months but we're hoping that things pick up speed as we head toward the releae of BlackBerry 10. It's noted here that it's still "our number one priority" --however the updated release date for BB10 devices is now Q1 of 2013. 

You can check out our full coverage and follow along with our live podcast and webcast during the call. Be sure to stick around after to hear our thoughts on it all. We'll be following up shortly with a breakdown of just what it all means, so be sure to check back later. 

Press Release

Research In Motion Reports First Quarter Fiscal 2013 Results

WATERLOO, ONTARIO--(Marketwire - June 28, 2012) - 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 June 2, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Highlights:

  • Cash, cash equivalents, short-term and long-term investments increased to $2.2 billion at the end of the first quarter
  • Cash flow from operations was approximately $710 million in the first quarter
  • Revenue of $2.8 billion in Q1, down 33% from $4.2 billion in the prior quarter
  • GAAP net loss in Q1 of $518 million or $0.99 per share diluted; adjusted net loss of $192 million or $0.37 per share diluted
  • Shipments of BlackBerry smartphones were 7.8 million and shipments of BlackBerry PlayBook tablets were approximately 260,000
  • BlackBerry 10 smartphone launch now scheduled for Q1 of calendar 2013
  • Restructuring efforts underway that will include a workforce reduction of approximately 5,000 employees as part of RIM's efforts to realize over $1 billion in cost savings, based on RIM's Q4 FY2012 run rate
  • Launched World Tour BlackBerry Jam developer sessions in 23 countries resulting in strong adoption and support by application and developer partners for BlackBerry 10 platform
  • BlackBerry App World continues to grow with over 89,000 applications available
  • The overall BlackBerry subscriber base continued to grow, and the subscriber base grew in all regions except for North America
  • RIM names Steve Zipperstein, former General Counsel of Verizon Wireless, as Chief Legal Officer

Q1 Results

Revenue for the first quarter of fiscal 2013 was $2.8 billion, down 33% from $4.2 billion in the previous quarter and down 43% from $4.9 billion in the same quarter of fiscal 2012. The revenue breakdown for the quarter was approximately 59% for hardware, 36% for service and 5% for software and other revenue. During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets.

GAAP net loss for the quarter was $518 million, or $0.99 per share diluted, compared with a GAAP net loss of $125 million, or $0.24 per share diluted, in the prior quarter and GAAP net income of $695 million, or $1.33 per share diluted, in the same quarter last year.

Adjusted net loss for the first quarter was $192 million, or $0.37 per share diluted. Adjusted net loss and adjusted diluted loss per share exclude the impact of pre-tax charges of $335 million ($326 million on an after tax basis), which are predominantly non-cash related to the impairment of goodwill. This charge and its related impact on GAAP net loss and diluted loss per share are summarized in the table below.

"Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities," said Thorsten Heins, President and CEO. "Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities."

The total of cash, cash equivalents, short-term and long-term investments was $2.2 billion as of June 2, 2012, compared to $2.1 billion at the end of the previous quarter, an increase of approximately $100 million from the prior quarter. Cash flow from operations in Q1 was approximately $710 million. Uses of cash included intangible asset additions of approximately $285 million, capital expenditures of approximately $155 million and a business acquisition of approximately $100 million.

BlackBerry 10 Update

The successful launch of the BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the Company's number one priority. Over the past several weeks, RIM's software development teams have made major progress in the development of key features for the BlackBerry 10 platform; however, the integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated. As a result, the Company now expects to launch the first BlackBerry 10 smartphones in market in Q1 of calendar 2013.

"RIM's development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience," said Thorsten Heins, President and CEO. "We are encouraged by the traction that the BlackBerry 10 platform is gaining with application developers and content partners following the successful BlackBerry Jam sessions that we have held around the world since the beginning of May. Similarly, the reception of the BlackBerry 10 platform by our key carrier partners has been very positive and they are looking forward to going to market with BlackBerry 10 smartphones in the first quarter of calendar 2013."

Organizational Update

RIM today also announced the appointment of Steve Zipperstein, former General Counsel of Verizon Wireless, as its Chief Legal Officer. Prior to joining Verizon, Mr. Zipperstein previously served as Deputy General Counsel for GTE Corporation and was employed with the United States Department of Justice as a federal prosecutor. Mr. Zipperstein joins Kristian Tear, Chief Operating Officer and Frank Boulben, Chief Marketing Officer as the latest additions to RIM's executive management team.

CORE Program

The Company announced its CORE (Cost Optimization and Resource Efficiency) program in March of this year. The program is focused on delivering operational savings through various initiatives, with financial objectives for the program targeted to drive at least $1 billion in savings by the end of fiscal 2013, based on RIM's Q4 FY2012 run rate. As a result of the shift in BlackBerry 10 launch timeline, the increasingly competitive environment, as well as the identification of additional cost saving and efficiency opportunities, the Company may increase the scope and magnitude of these programs, and considers these original estimates as minimum numbers it will be pursuing.

To date, the Company has started implementing a number of these initiatives including:

  • a reduction in the number of layers of management to drive better clarity, efficiency and accountability across the organization;
  • the continued streamlining of our supply chain, which includes the consolidation of our manufacturing footprint from 10 external manufacturing sites to three, and working closely with our suppliers and other partners to identify ways to drive further efficiency;
  • outsourcing key parts of the Company's Global Repair operations, including management of device level repairs;
  • targeted use of resources in our sales and marketing initiatives to more effectively leverage marketing windows and prioritize our marketing efforts and spend in regions that offer the highest opportunity and return;
  • further outsourcing of non-core functions as determined during the implementation of the CORE program; and
  • a global workforce reduction of approximately 5,000 employees, which is expected to be completed by the end of fiscal 2013.

The Company expects to incur restructuring related charges of approximately $350 million by the end of fiscal 2013, primarily associated with the global workforce reduction. Other charges and cash costs may occur during this process, and the Company intends to share more details throughout the year regarding its progress as programs are implemented or changes are completed.

Outlook

The Company expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM's monthly infrastructure access fees, and the Company's plans to continue to aggressively drive sales of BlackBerry 7 handheld devices. The Company expects to report an operating loss in the second quarter of fiscal 2013, as RIM continues to invest in marketing programs and continues to work through the transition to BlackBerry 10, as well as the Company's fixed costs being allocated over a lower volume of shipments. This outlook excludes the impact of charges related to the CORE Program.

Reader comments

Press Release: Research In Motion Reports Q1 Results for Fiscal 2013 - BlackBerry 10 phones delayed until Q1 2013

293 Comments

Hello trolls, it look like you have sharpened your troll skills and making 'more sensible less explisit trolling' comments. Good for you. You trolls may frightened ordinary people but I'm sorry, I'm not afraid. Yes, it's a bad news but we already know it will not be all good. You can bash all what you want and managed to lower RIM stock price even more. I'll join you buy it back again as cheap as possible.

For those of you who disappointed because the delay of BB10. You can always buy another phone if you want. And/or buy BB10 when it's out.

For me, the delay is somewhat releaving. I can save more money while using it for other expenses first. I'm still using odin now and thinking to try monza first before BB10. You see, where I live if I want to have decent internet connection but not expensive I'm gonna need Blackberry's encrypted and compressed BIS. So yes, I will keep using BB because I need it. Iphone is way overpriced here with no carrier's subsidised offer. Many people here chose android for the hype,cheaper than iphone,and rooting ability (which not many people I know understand how to use it and only use it to play games or watch movies. And try any hype apps they can get. What I need, is on BB and it's BIS. So yeah, despite of what those vultures done and still doing to RIM, I will still need my Blackberry. If iphone not overpriced here I want to have one too, though I don't really need it. As for androids, I don't need it, but I do want to try any decent spec with reasonable price tab. One thing I know for sure. Where I live, I need my blackberry with me.
-written using my odin ;)

shut the fuck up. your blackberry is probably your girlfriend too...

trolls for stating the obvious? go jerk off to a pic of the dev alpha and leave those who run business and understand it be while we discuss REALITY

Are you one of the trolls? I never said that trolls lies or deceiving. Trolls make good things look bad, and bad look worse. And what I wrote is reality where I live.

Oh by the way, don't worry, I wasn't mentioning you when I said hi to trolls, your choice of language are harsher than trolls lol. And should I link you to my facebook profile so you can see my gf? I better not. I prefer you stay here lol.

Or troll is the word a person calls a user for helping them realize the truth. The person doesn't like the truth because they are either biased for a particular thing, or just too optimistic.

Who? Me? Lol, nah,I'm not as lucky as you. Trailer parks in U.S. still have faster intesmet connection than home broadband in my country (ok I'm exaggerating lol). Average speed in my country is 800ish kbps if I remember it correctly. That's why I said I need my Blackberry. That's reality in where I live :)

By now you should be able to guess where I live and found my fb profile. Or not lol. Ask more then ^^

Why are the bb10 phones delayed when all that was waiting for was a chipset that was supposed to be built in the second half of the year of 2012.

Sorry Thor, you can see significant advances in the OS is not good enough and need to hear an official device being announced. BB10 is supposed to have been ready.

I love my bb but come on.

Sad, sad news for the loyal here......been with BB for years but this MAY be the final straw, for both many BB users & the company's relevance. As the current CEO stated....BB10 will be the key to Rim's survival....but by the time it comes out it may make no difference. RIM may survive with it's sales in the Third World, but as for the States here, I'm afraid RIM is pretty much over.....

This is seriously gonna hurt. RIM needs to do something to help out people that have stuck by them this far. My proposal is, since they know every active BB PIN, offer a trade in program where you sign up with your PIN, purchase a BB7 device direct from Blackberry for $100/$200 depending on model (like you would signing a contract), and once you get your new phone, you have 30 days to mail your old one back to RIM (pre-paid mailer) or you get charged the balance of the phone's price (like a warranty replacement). Put a stipulation on it that the phone has to have been active on your account for at least 6/9/12 months (whatever). Also make a stipulation that the phone must stay active on your account for X months (so people don't just get them and sell them on eBay). They should easily be able to tell this between BIS account info and BBID info. End result, users can upgrade without signing a new contract and losing their carrier upgrades, and BB can move stock on phones that won't sell on contracts because they are already aging severely. BB faithful will be happy with newer devices, and they can take the cost of the program out of the marketing budget since they obviously don't spend any of that money anyways...

IM a hardcore blackberry fan and developer now...and this is a big kick in the face, i just went to the blackberry 10 jam in toronto not too long ago and i was told BB10 is on track, what the heck is that. RIM cant seriously being doing this. Im no troll but RIM in so much shit, shit shit shit. RIM USED TO BE KNOWN TO UNDER DELIVER and THIS MAKES THE STEREOTYPE A REALITY. Playbook 4G, BB10, playbook OS 2, OS 7 all were delayed.

I was just kicked in the face... RIM is not depending on us its depending on investors and execs now, its totally out of our hands.im shattered

This is awful awful news. They underperformed big time, wtf, these numbers are absolutely horrible, job cuts of 5,000? Wow, RIM, way to disappoint majorly. I will continue to support you, and buy your products, but the higher-ups have really disappointed us RIM supporters.

2013? Blackberry will release a nice device years behind Android and Apple... and the trend continues...

Wow!

Well I guess that's that. This is like the moment when someone gets declared terminally ill. RIM must be like a time bomb at this point. Maybe someone could buy them and get RIM some decent management?

If someone buys them, they will for patents then liquidate the company. Keeping a terminally ill company like RIM is not financially viable.

I wish the mods would delete your account and never let you back on this site. You are nothing but an annoying pr_ck with nothing better to do but be a jackass. You hate RIM...we get it.....now f_ck off!!

my friend is thinking of selling his playbook for a nexus tablet... trying to convince him not to, wait for bb10... ... Hard To BE a Blackberry fan right now... ...

The market needs RIM to stand up and be a player. They were competitive in the old Palm OS days but sat on their high thrown shoving phones down corporate throats way too long and are now being punished and rightfully so. However, there is a light at the end of the tunnel as long as RIM can keep the financial machine going and give their devs time to polish BB10. The optimal situation is that we have iOS, Android, WP, and BB about even in the playing field so that competition pushes innovation and we all win out.

If BB does go away, then another player will have to fill the gap (uh... WebOS??). I hope that we aren't stuck with only 3 choices... or even less. That would be awful as a consumer.

That's it. I am officially done with blackberry. I have fought tooth and nail to convince people about the benefits of blackberry. Don't get me wrong, I love my blackberry and think it is an amazing phone. I could even deal with the delay to Q1 2013. However, what has become the deciding factor for me to leave blackberry is the reported 5000 job layoffs they will eventually role out. How can a company justify laying off that many employees yet continue to pay its executives ungodly amounts of money. Hell, according to crackberry reports, Heins alone is scheduled to make 10.2 million in the 2012 fiscal yeah (http://crackberry.com/tags/thorsten-heins).

Rather than laying off your hardworking workforce, why don't you take a pay cut Mr. Heins and all the other executives making unfounded amounts of money. I supported this company because it was a Canadian company and permitted many Canadians to make an honest living with their employment at RIM. Now however, these employees have to suffer while the higher ups continue to enjoy their lavish lifestyles.

F*&% me_WTF RIM????!!!!! I have been waiting for my BB10, so I guess no upgrade to BB10 for my playbook either??? I am so morose

F*&% me now, WTF RIM???!!! Q1 2013 ??????!!!

I guess this means no upgrade for my Playbook either?...I am so morose, hope after this looooong wait, it is going to be worth it....

I got the news late (like about 20 minutes ago). I mostly visit 3 sites daily, that is Crackberry.com, and two other sides. I had visited Crackberry.com earlier today and forgot to check back this evening.

I am a zealot when it comes to Blackberry. I carry two with me at all times (and I several in boxes to replace the ones I carry should I drop one or lose one, etc.)

No matter how dark the clouds on the horizon appeared, I would go back to whatever it was, I was doing. I had a lot of faith that the company would come through with BB10, on time, and that my patience would ultimately be rewarded.

Yes, I have had impure thoughts. I have been tempted by the iPhone (the great deceiver), or the Android. The Galaxy SIII has crossed my mind numerous times but still I remained faithful to the Blackberry.

I was on a political site I frequent celebrating that the Supreme Court upheld the healthcare legislation when I decided to visit Crackberry to see if any interest things had been posted. I saw the article about the Crying Podcast. I thought, must be a slow news day, so I continue to scroll down and that is when I saw the post about the conference call, but did not realize until I saw another post about the delay of BB10 phones that really just made me sit back and sigh.

We have to face facts that this could be the end of Blackberry as we know it. I do not want Blackberry or Research in Motion to ever go away but with the announced delay I do not see how they can recover. Yes they are still going strong in other markets, but they need to retake a large share of the market here in North America, or get out of it all together.

I will stick with Blackberry (but in the back of my mind now I am wondering if their board is not just using the time they have to find someone to either buy the company, or figure out a way to break it up to benefit the shareholders).

I have had iPhone (the first three), Android (several) and Windows Phone, and Windows Phone was the only one I could tolerate, but Blackberry was second to no other phone. I just cannot imagine my life without my Blackberry or Blackberry Messenger, and the way the email is delivered or the way notifications through all the applications just get pushed ever so perfectly to the device.

Now all I can see is Liam Neesom standing there, in a scene from Wrath of the Titans saying, “There will be no more chances. No more Blackberrys.”

The news is indeed a stain on this fine company that we have all come to appreciate. So where do those of us who are diehard Blackberry users go from here?

It's NOT over until the FAT lady sings bro. They will deliver BBX and it WILL exceed our expectations. Be loyal to the END.

I know. I know. I am not going anywhere. I just hope, as I said before, that they are not stalling and the board is not trying to sell the company.

OK, Thorstein Heins, this better be good. You had better have a SUPER GOOD excuse for this delay until 2013. Why won't you release BB10 this year ??? Do you know that if you don't release it this year, you will lose so many LOYAL followers ? Release BBX this year already, then have incremental updates thereafter. At least you can still keep your loyal blackberry users afloat until you can polish the OS will incremental updates. That's how you play the game. Sheesh !

Dear Canadians,

We have to support RIM until the very END. RIM has become a symbol of pride to every Canadian. I am a Canadian and I don't care if other companys are better than us in technology. I just care that our jobs in Canada depend on this company. If RIM stays alive then we will prosper as a nation. It's not about being faithful to a brand anymore. It's about being loyal to the Canadian flag. Backberry has become our flag of pride. If Blackberry dies, a BIG part of Canada will die too. I will be ashamed to be a Canadian if Blackberry goes under. Everyone in the world will think Canada is a technological ill country. They will think that Canada is not prosperous and we will not benefit from trade with them. I will support Blackberry to the very end. Now is the time to show RIM our support. My current phone is a Blackberry, and my next phone is still going to be a Blackberry.

Loyal Canadian

First let me state my credentials, I am a loyal supporter of blackberry, I've kitted out my wife and kids with bb phones. I delayed on the pb until they got it right, and i still wont buy one know because we all know the 16gb is being discontinued, plus bb10 forthcoming. I delayed on upgrading my bold 9700 because of forthcoming bb10. So now i feel totally trapped, whats the point of upgrading to a bb7 phone for 2 years when its going to be obsolete soon.

For the first time i am furious with rim, i appreciate they want to get it right, but by then they may have no customers. I've never been one of those who speak of the death of rim, but now i just cant see the light at the end of the tunnel. They have exhausted my trust because they have failed to deliver anything right for 2 years now.

Be honest if you're on a sinking ship do you drown or get on the nearest life boat even if its not your preferred option?

No wonder developers are reluctant to develop for bb10, they'd be just wasting their time and money. Seriously, after these announcements if you were a developer would you be bothered with bb10. The absolute most I would do is sit back and wait, if it is a success (unlikely) I'd jump on board then.

That's pretty much it.

They've been stringing us along for years, from one bait on to the next. What about all the people who just spent months working on BB10 apps for the big launch in the fall?

HTML5 and AIR make it possible to publish multi-platform apps for BlackBerry along with the main platforms, so I will still publish some items for BlackBerry, but nothing RIM-native.

i.e. nothing that uses their fancy new UI stuff.

lol sorry but its pathetic by the time they release the new phones and os itll be behind apple and android, I feel sorry for you guys keep waiting for an obsolete software and hardware already.

This is the part where the great ship Blackberry begins taking on water and folks begin abandoning ship.

How in the blue hell could they think they could miss their deadline?

Man they are going to take a beating! BB10 better shit rainbows and do somersaults (or even moonsaults).

I would like to see Zuckgerberg buy RIM! I mean, fb has enough funds and investors to take RIM,...and fb to a whole new level.

By this time next year RIM will flatline! Too bad,...as I really enjoy the security of a BB!

JMD

I think this is the final nail in the coffin for RIM. They can't hold to a deadline, Apple with have the iPhone 5 later this year, Jelly Bean(OS4.1) will be here for Android in mid July, Windows 8 and all their intagration will be here lat this year, and RIM will release a device in Q1 of 2013 that will try and compete with what the compition has already released over 6 months ago once again...now the tough decision happens...do I chose Apple, Android, or a Windows phone to replace my beloved BlackBerry...

The way things are going now, by the time RIM releases a BB10 device,...Apple will have leaked or announced the iP6 (iPhone 6).

RIP RIM...its over...fire sale time. Called it and now its hear, they should have made this by now and they did not.

Apple and Android time...

ugh..not another delay from RIM.

So does this mean no BB10 phones until Q1 2013, but what about the operating system itself? Will it come out for the playbook at the original scheduled date?

Very disappointed. I love the hardware and software of my playbook, but there really is not much apps for me to use. There are hundreds or maybe thousands of useless apps for use with the Android Player which still is not 100%. Not enough native/made for qnx apps.

Now BB10 will be delayed? That was the only thing I was hoping for. I'm not going to sell the playbook as I won't get what I paid for, nor can I install cm9 because the lack of support.

I'm just going to forget about this until a article comes out saying it's finally released. For now I will just wait a month so I can get a new phone and use that more often.

2013? By then, Android and iPhone will be so far ahead it won't matter what BB 10 does.

It will still be a brand-new platform and ecosystem, with major problems for years.

All that Android needs is better keyboards and email, and there will be nothing better about BB.

... and surely Samsung, HTC, and Moto will figure that out by 2013.

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