Press Release: Research In Motion reports second quarter fiscal 2013 earnings

Research In Motion
By Kevin Michaluk on 27 Sep 2012 04:10 pm
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Research In Motion has just announced their earnings for the second quarter of fiscal 2013. You can read the press release below and can tune into the live webcast and CrackBerry live blog which will be kicking of at 5pm ET.

Once the dust settles, we'll be following up with our in-depth analysis on the market's recation and what the numbers all mean to the company. In the meantime, keep reading for the press release.

* Update: Shares of RIM are trading up ~ 12% in after hours trading. With cash on hand actually going up this quarter as well as net subscriber numbers, I think the market is a little surprised. Things are looking good here that RIM will be bringing BlackBerry 10 to market full force. More in-depth coverage to come. *

* Update 2: Make that 22% up! *

Press Release

Research In Motion Reports Second Quarter Fiscal 2013 Results 

WATERLOO, ONTARIO--(Marketwire - Sept. 27, 2012) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported second quarter results for the three months ended September 1, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Highlights:

  • BlackBerry subscriber base increased to approximately 80 million global subscribers
  • Cash, cash equivalents, short-term and long-term investments increased by approximately $100 million to $2.3 billion at the end of the second quarter
  • Cash flow from operations was approximately $432 million in the second quarter
  • Revenue of $2.9 billion in Q2, up 2% from $2.8 billion in Q1
  • GAAP net loss in Q2 of $235 million, or $0.45 per share diluted, including $136 million in pre-tax restructuring costs; adjusted net loss of $142 million, or $0.27 per share diluted
  • Shipments of BlackBerry smartphones were 7.4 million and shipments of BlackBerry PlayBook tablets were approximately 130,000

Q2 Results:

Revenue for the second quarter of fiscal 2013 was $2.9 billion, up 2% from $2.8 billion in the previous quarter and down 31% from $4.2 billion in the same quarter of fiscal 2012. The revenue breakdown for the quarter was approximately 60% for hardware, 35% for service and 5% for software and other revenue. During the quarter, RIM shipped approximately 7.4 million BlackBerry smartphones and shipped approximately 130,000 BlackBerry PlayBook tablets.

GAAP net loss for the quarter was $235 million, or $0.45 per share diluted, compared with the GAAP net loss of $518 million, or $0.99 per share diluted, in the prior quarter and GAAP net income of $329 million, or $0.63 per share diluted, in the same quarter last year.

Adjusted net loss for the second quarter was $142 million, or $0.27 per share diluted. Adjusted net loss and adjusted diluted loss per share exclude the impact of pre-tax charges of $136 million ($93 million on an after-tax basis) related to the Cost Optimization and Resource Efficiency ("CORE") program. This charge and its related impact on GAAP net loss and diluted loss per share are summarized in the table below.

"Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition," said Thorsten Heins, President and CEO. "Subscribers grew to approximately 80 million global users, revenue grew sequentially from the first quarter, cash, cash equivalents, short-term and long-term investments increased by approximately $100 million to $2.3 billion, and carriers and developers are responding well to previews of our upcoming BlackBerry 10 platform. Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013."

The total of cash, cash equivalents, short-term and long-term investments was $2.3 billion as of September 1, 2012, compared to $2.2 billion at the end of the previous quarter, an increase of approximately $100 million from the prior quarter. Cash flow from operations in Q2 was approximately $432 million. Uses of cash included intangible asset additions of approximately $253 million and capital expenditures of approximately $87 million. 

Outlook: 

The Company expects that there will be continued pressure on operating results for the remainder of the fiscal year based on the increasing competitive environment, lower handset volumes, increased marketing expense associated with the launch of BlackBerry 10, and some impact from pressure by customers to reduce RIM's monthly infrastructure access fees. Also, the Company plans to continue to invest in targeted marketing and sales programs to aggressively drive sales of BlackBerry 7 handheld devices before the anticipated launch of the BlackBerry 10 smartphones. The Company expects to report an operating loss in the third quarter of fiscal 2013 as RIM continues to work through the transition to BlackBerry 10 and completes its CORE program. This outlook excludes any benefits or future impact of charges related to the CORE program. 

For full press release breaking numbers breakdown, click here

Kevin Michaluk Kevin Michaluk "Founder, Editor in Chief " 3921 (articles) 3285 (forum posts)
47 comments

SurrealCivic

Great earnings!! Finally RIM beats!

REV $2.87B vs $2.47B expectation
EPS -$0.27 vs -$0.47 expectation

RIM ships 7.4M units this quarter

REVENUE BREAKDOWN:

60% from Hardware
5% from Software
35% from Service

meinarson

Don't get me wrong I agree, this is good news. I just worry that despite today's results the stock will take a hit in the morning. I do think they can pull this off that's why I own shares.

kozmo68

I kind of hope it drops so I can swoop in and purchase me a boat load of shares before BB10 comes out...

Thunderbuck

Me too. In fact, I just bought more this week when it was trading at $6.20.

I think the point here is that RIM is actually presenting some improvement over both the previous quarter and Q2 last year.

They aren't out of the woods by any means, but between what they've previewed at Jam Americas this week and these encouraging financials, maybe they've seen bottom.

NamelessStar

seems decent compared to what was expected

koolrosh

This is the beginning of RIM's comeback!

sf49ers

Great to see they that have $2.3 billion in their kitty now

Poodwahr

Fantastic quarter. This will silence the nay-sayers!!!

Thunderbuck

No, it won't. I'm bullish on RIM and even I can't quite go that far.

It will likely take a year before those nay-sayers are silenced completely. RIM actually needs to become profitable, for one thing.

There are two take-aways from this call:

1) RIM is proving able to slow the bleeding even in the absence of new product. That's important, and impressive.

2) Even with all the pressures they're facing, they're not panicking. In fact, they're executing much better than they were a year ago.

I'm much happier than I was an hour ago.

elmit22

i have just watched the RIMM shares jump on this good news

Anonymous94587689

After hours trading ( 4:15pm EDT ) $ 8.01 ( 12.18% )

Anonymous94587689

After Hours: 8.38 +1.24 (17.37%)
Sep 27, 4:35PM EDT

mnhockeycoach99

Actually, it is up to $8.48 now...according to Yahoo Finance.

elmit22

i brought last week at $6.31 looking good. GO RIMM

pepe241185

Much better than I expected .... Whoever said RIM was done ?? ... Not bad ... Keep up the hard efforts ... RIM #FTW

BlackBerry By Choice!

mapsonburt

That's what I'm talking about.... under promise and over deliver. Well done RIM. Now to get the growth and profit back up...

Chaplain_Clancy

Those consolidateds look like they should give investors some confidence.

RubberChicken76

Not fantastic, but it would seem that the over-doom reporting in the market may have reached its saturation point.

Geeoff

This is great news!

Sure, it's still a loss, but adding cash is always good. And beating expectations is very important!

JPMorgan_

Better than expected does not mean "fantastic quarter", the company just posted a loss on the quarter, phone shipments down again, and just over 130,000 PlayBooks shipments for the quarter.
The bright side is the little cash increase (or that it didn't shrinked last quarter) that the company will need to use for a succesful BlackBerry 10 global launch and marketing efforts.
One more earning report to go, before BB10 launch, I don't know what will happen in the end, but Thorstein Heins has done a pretty decent job so far.

john_v

"Also, the Company plans to continue to invest in targeted marketing and sales programs to aggressively drive sales of BlackBerry 7 handheld devices before the anticipated launch of the BlackBerry 10 smartphones. "

I'm not a marketing or business guy, nor did I stay at a Holiday Inn Express last night; but why would they burn valuable cash on marketing BB7 at this point? Unless the "targeted" marketing is targeted in the developing markets?

Just a sincere curious question.

NamelessStar

its the same reason they made so much $$ bb07 in africa and EU and asia has been rocking they need to keep the marketing up to keep that trend growing.

JPMorgan_

Because they can't afford to write-down the BB7 inventory they currently have, and continue to produce I believe. They need to get as much revenue as they can from BB7 before BB10 launch.

aaast36

JPM, were you on the call? Can't afford to write down inventory? Several analysts and Brian addressed this extensively in the Q&A session. Inventory control and not having a gluttony of product sitting around were a key point in controlling costs. P&L 101, they've worked considerably to reduce on hand, and have cut down to 5 suppliers/assembly systems from the original 10. Asia, Africa, and ME have all been a focus. The lower end products that Thorsten spoke about (9200 series)will continue to be a revenue driver for the lower end market, and BB7 marketing as well as support will continue well into the future, so yes, a driver for growth. That's their plan, that's what they said, not what anyone believes.

BBTASTIC01

Congrats to everyone at team RIM, this is a far better result than everyone was expecting and shows that Thorsten and the management team in place are the right people for the job of turning things around and delivering an amazing set of products in 2013.

KEEP UP THE GREAT WORK :-)

bluetroll

SUCK IT, NEGATIVE ANALYSTS!!!! BB10 BABY!!! I'm ready for it, are you?

mnhockeycoach99

+100 million (the $$ they added to their cash kitty).. Go Team BlackBerry!!

mnc76

This is news is much better than expected! Especially in light of them not having BB10 phones out yet. RIM has demonstrated that they still have a lot of fight left in them and that they are going to keep swinging no matter what! Good work RIM. Keep it up until BB10 launches!

martinjdub

A tip of the hat to Thor and co...

...and a moment of silence for those who lost there jobs to bring us this good news

BBTASTIC01

I second Martinjdub's comment.

bitek

Are all these playbook discount sales included in this report ? 130,000 playbook sold seems low with all the discounts happening.

Skeevecr

That was shipped, it probably means that stock levels in the stores reduced.

kozmo68

Just goes to show that the ANALysts may not usually get things right.. currently $8.55 in after hours trading.. I'm so sorry I missed the $6.80 boat...

RIMPIRE strikes back baby!

camera531

The ship didn't explode, but I wouldn't stand up and celebrate just yet... Long way to go

Skeevecr

Considering what it could have been if sales had been worse or their cash reserves had fallen drastically, these were just the kind of results they needed this quarter, putting them in a much stronger position while they work hard to get bb10 ready.

uncaringbear

This is an encouraging result, and while we shouldn't get overly optimistic, let's hope this is the start of an upward trend for RIM.

Skeevecr

Possibly in the stock price, but other than that the trend is still downwards and will be so until after they have got the bb10 handhelds into the shops, these quarters have always been about losing as little money as possible which they do seem to be managing to do this time at least.

axllebeer

Finally things are looking up for RIM

Adventuro

Wow, proving all the analysts wrong. I wonder if they are kicking themselves for not buying in for a long stock position now. They are executing as good as they can given their situation.

zma15

Solid earnings!!

But what worries me is that this is coming just after the iPhone 5, meaning that alot of BB users will be switching to the iPhone in the next few weeks which as we all know spells bad news to RIM.

Android Market for QNX

Not bad at all, first time in years they beat analysts' expectations, which is why stock jumped. I think they need to continue to stay low-key and not offer ridiculous guidance. I am actually impressed by their performance, considering everyone pretty much expected the losses mount.

A sliver of hope, but it could be enough for them to do well again after BB 10. Cheering them on!

NickMcBride

Nice to see RIM exceed expectations after a tough previous quarter, not amazing but positive results in my opinion! Let's hope for a good next one too!!

Blackberry for Life