Press Release: Research In Motion reports third quarter results

By Adam Zeis on 16 Dec 2010 04:22 pm EST
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RIM logo

Research In Motion Reports Third Quarter Results

WATERLOO, ONTARIO -- (Marketwire) -- 12/16/10 -- Research In Motion Limited (RIM) (NASDAQ: RIMM)(TSX: RIM), a world leader in the mobile communications market, today reported record third quarter results for the three months ended November 27, 2010 (all figures in U.S. dollars and U.S. GAAP).

Highlights:

  • Record BlackBerry(R) smartphone shipments of 14.2 million grew 40% over the same quarter last year
  • Revenue grew 40% over the same quarter last year to $5.5 billion
  • Q3 Earnings per share of $1.74 were up 58% over the same quarter last year
  • Cash increased by $446 million to $2.5 billion at the end of the quarter

Q3 Results:

Revenue for the third quarter of fiscal 2011 was $5.49 billion, up 19% from $4.62 billion in the previous quarter and up 40% from $3.92 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 15% for service, and 3% for software and other revenue. During the quarter, RIM shipped approximately 14.2 million devices.

Approximately 5.1 million net new BlackBerry(R) subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 55 million.

"We are pleased to report another record quarter with strong growth in shipments of BlackBerry smartphones leading to record revenue, subscriber additions and earnings. RIM's business continues to grow and diversify as BlackBerry adoption accelerates in markets around the world," said Jim Balsillie, Co-CEO at Research In Motion. "With strong results and momentum from our recent product introductions, as well as growing excitement from our partners and customers around upcoming smartphone, tablet, software and service offerings, we are setting the stage for continuing success."

The Company's net income for the quarter was $911.1 million, or $1.74 per share diluted, compared with net income of $796.7 million, or $1.46 per share diluted, in the prior quarter and net income of $628.4 million, or $1.10 per share diluted, in the same quarter last year.

The total of cash, cash equivalents, short-term and long-term investments was $2.47 billion as of November 27, 2010, compared to $2.03 billion at the end of the previous quarter, an increase of $446 million from the prior quarter. Cash flow from operations in Q3 was approximately $975 million. Uses of cash included capital expenditures of approximately $300 million, common share repurchases of approximately $133 million, and intangible asset purchases of approximately $45 million.

Q4 Outlook:

Revenue for the fourth quarter of fiscal 2011 ending February 26, 2011 is expected to be in the range of $5.5-$5.7 billion. Gross margin percentage for the fourth quarter is expected to be similar to third quarter levels. Earnings per share for the fourth quarter are expected to be in the range of $1.74-$1.80 per share diluted.

Update on RIM's Board of Directors:

RIM announced today that its board of directors has appointed co-Chief Executive Officers Jim Balsillie and Mike Lazaridis as co-chairmen of the board. John Richardson remains as lead independent director of RIM and will continue to facilitate the functioning of the board independently of management. The board believes these appointments, in conjunction with Mr. Richardson serving as lead independent director, represent an appropriate and effective leadership structure for RIM. RIM also announced today that Jim Estill has resigned his position as a director of RIM due to a business conflict. RIM thanks Mr. Estill for his 13 years of serviceon the board.

Conference Call and Webcast:

A conference call and live webcast will be held beginning at 5 pm ET, December 16, 2010, which can be accessed by dialing 800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the company's Q3 conference call can be accessed after 7 pm ET, December 16, 2010 until midnight ET, December 30, 2010. It can be accessed by dialing 416-640-1917 and entering passcode 4310313#. 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.

57 comments

Dekerta

That's fantastic news. I knew RIM would pull through and silence the "Blackberry is dieing" crowd.

And now maybe RIM can spend a little money and fix the disaster they created for developers a few weeks ago.

Jean-luc_Picard

The only thing that could silence the "blackberry is dying" crowd would be blackberry becoming the only smartphone manufacturer to sell any phones, but i'm still glad that they had a good quarter. What stocks me the most is the up 19% from last quarter. I didn't think the advertising from the torch was quite THAT good! (though I'll admit it's a great phone, i'm typing out this response on it right now!)

JRSCCivic98

I'm willing to bet a large sum of that is from selling those older devices to the other countries they were entering during the Summer months and towards the end of it. We all know RIM looks at their gans in global terms... it's a good chance that the margins got inflated quickly due to those quick sales they made that way. I'd like to see the exact breakdown of what was sold where and how much of that makes up the pie for the new gains.

_StephenBB81

It is for sure a result of selling into emerging markets and maximizing the existing toolings of current products at new price structures.

No chance they would release a full breakdown of region by region, it would be giving too much information to competition who could target product releases to battle RIM,

I am happy for RIM, but am hoping they don't go pat them selves on the back for the next 2 months and enjoy consistent growth in the emerging markets and they put on their war hats looking for growth in their existing markets such as North America, and Europe, I am hoping that 300 million in Capital expenses was tooling or manufacturing upgrades to get ready for building comparative smartphone products in 2011,

crackhoer

OS6 needs SO much more work right NOW.

BBThemes

56% went to UK, USA and Canada, the rest was spread out between the other countries with no one country taking more than 5%, UK was 12%, USA was 34% and Canada was 10%
so the majority were more in current rather than emerging markets.

Supa_Fly1

One would think that yet some channels still had to be fulfilled for shipments so this quarter is actually UNDERSTATED because the quarter completed before revenue from shipments could be allocated as such until shipment completed.

RIM and crew … WELL DONE! Now haters hear this … if you don't like BlackBerry then you can have another fruit of your choice … you can suck on a lemon (sour Apple hehe) or Eat a Ban'an'a! (or have my Plantan).

But seriously RIM did a fantastic job … here is to a fantastic 2012 FISCAL year.

green_ember

I'm also glad to see RIM doing well. I work for a company that does they majority of its sales overseas and think that people on here just don't understand the global economy.
I agree with you, there are still going to be people posting in this thread saying that these results don't mean anything. Can't wait for the first troll that jumps to the North American market share argument ignoring the facts...

jwmax

Right on man. The crazy thing is analysts don't get it either. They focus on the apple android US market share only. What is even dumber is that they fail to see that Android came out of nowhere and that Blackberry has QNX so they will soon be back in the game in the US.

What people really don't understand is that value depends on making things hard to mimic. A flashy OS ;) is just not good enough to retain value. What RIM has is corporate security and support. This will be the key to their long term value. I mean just think about the corporate decision on what tablet to go for. iPad has more Apps RIM has corporate security and a platform that is easy to write apps for. This is about as close to a no-brainer as anyone could come.

Apple has iTunes and currently a flavor of the month factor. The latter certainly won't last and the former, while hard to crack, is not impossible to crack. I'd go for RIM in the long run.

Android, will be almost a total flop in the long run. Software is given away free from a company that is struggling to keep employees from defecting to Facebook. Facebook has a super business model with strong network effects that are very hard to break. The whole model of Google is doomed in the long run. Strip all the glitz and it is an advertising sales firm. Ho Hum. Maybe that is too harsh but I don't see android with it's multiple platfrom sercurity issues pushing blackberry out of it's corporate position.

Lovin_Soul_Glo

But but but rim is a dying company and their quality sux!!! I think the iphone is better then blackberry and rim will fold soon! Don't buy blackberry! /sarcasm

Witmen

RIM is obviously the next Palm. I mean record breaking sales? What's that all about? How do they expect to stay in business doing crap like that. Rest in peace RIM. You had a good run, But it's clear to see your dead. :)

diswiddlepiggy

Blackberry is definitely doing something right. I waited for the white Torch to come out, and read a lot of bad reviews in the meantime. I still bought it, and I'm glad I did. This is my second Blackberry device purchase (both this year) after being a disillusioned iphone user, and I have converted my dad, my bff, and my 13 year old daughter to RIM smartphones from dumb phones. I'm not at all surprised by their numbers, despite all the naysaying that goes on.

BBThemes

judging from the q3 revenues, and the predicted q4 revenues, that looks like a march release is intended for the playbook

WillieLee

That seems to be the case. Or it will come very late February.

123berryaddicted

Say... Speaking of which (pb)... Where is the dude a couple weeks back who claimed he had a playbook, released so lamo little video of it and said more was coming shortly??? I doubt he actually had one... Where are you dude?

shlammed

Listening to the investor call right now.

Jim B has stated that over 1000 new vendors have signed up for App World since they opened the doors to Playbook apps.

Can't wait to see what comes in the future.

Tripster

RIM, haters only bring in more revenue for ya'll in the long run cause if someone says how crappy BlackBerries are...some people might just go out and purchase one to see the claims.

Trolls will be trolls!

fass

I've been an Apple customer for the last 15 years. This year I bought the Torch (love it} and am picking up a used 9000 next week to use also. I will buy the Playbook next year and some RIM stock. I am a new convert and I'm sure there are a lot more.

falconeight

Well RIM better take advantage of their success. If thy don't produce something without glued on pasties and modern soon those crack addicts will leave.

bahandi

But how many years have people been saying that?

falconeight

They have always had something good. The bold 9000 the bold 9700. They haven't come out with anything worthwhile since then.

Aalejandro

Beg to differ The Torch/Style/Pearl3G , all great devices

_StephenBB81

I very much agree! They have addressed form factors that are not the main stream, and I truly hope they continue to do so in 2011 and beyond, The Pearl and Style are not for me but BOTH form factors I know many people who swear by them and are so glad to have a smart phone over a feature phone.

Ronindan

Leave it to RIM defy people's expectations

av8ryxx

Unbelievable that people look at those numbers and try and paint them in a negative way. Who cares where the phones are being sold....emerging markets become mature markets and profit is profit which ensures a strong company. The economy is becoming more global everyday and I get tired of people in the US thinking that they are the only consumers on the planet.

Aalejandro

Spot on , RIM is securing markets that Apple/Android aren't investing much is North America will eventually become saturated

Supa_Fly1

Saturated, an overused term in the mobile industry by fans - whom have no clue that does NOT apply.

How often to you replace your Jeans, Shirts, Khaki's or slacks? How often to you purchase music every year, your PC every 3/4yrs(?)? Do you get my vague point here? People in the United Kingdom have already hit an 90%+ saturated cellphone use for anyone about 19yrs old. Of that over 60% are smartphone users. They STILL upgrade every 12mths on contract like a baby after mothers' milk. Same thing will happen to North American customers - and a HUGE paradigm shift to contracts will occur just as this happens say 5-10yrs down the road.

123berryaddicted

There's people and land beyond the mighty USA??? Are you sure about that?

Supa_Fly1

Damn straight! Too many in the USA don't realize their economy is based on credit and hardly anyone has real cash to continue spending - Black Friday 2010 is the key here: Dollar went up for the weekend and back down again.

All cellular company's that report ONLY USA sales at quarterly reports should be shot.

gyubok

This is indeed an awesome news however I am still concerned with percent market share. Why does RIM only have 15% of global smartphone market share compared to Apple's 17% when Mike explained over and over that RIM's focus is to target global market instead of US during his interview with Mossberg last week?

Does this mean Apple is beating RIM inside US and globally :( !

WillieLee

It means that people shouldn't pay so much attention to market share that comes from research firms that aren't giving definite numbers. RIM was the only company to publish their actual active subscriber numbers. Everyone else was based on estimates.

Also, market share doesn't stop a company from being profitable.

BBThemes

its also worth noting that the numbers from RIM`s subscriptions come from BIS/BES registrations as well as sales, so they are `solid` numbers.

`activations` of devices count for nothing, as if i have a galaxy S and its broke, so its replaced, thats 2 activations but one subscription.

so if your BB is replaced by warranty/insurance they the subscription figure is still right, if you iphone/android phone is replaced, youve added another activation to the list but you havent added a subscription, so the figures just end up (un-intentionally) over inflated

SCrid2000

Wow - wish I'd bought a crapload of stock in RIM, that's a pretty decent increase.

TheEdge

1) Android manafacturers and Apple are reporting good results too.
2) I travel back and forth to 2 of RIM's biggest emerging markets and feedback from these new BB users is not good wrt the phone specs and OS.

That's all you need to know RIM. Back to you still failing to lead and innovate and still trying to play catch up with Apple (now the tablet), the Playbook that is, which you will never ever gain traction with existing BB users, corporates and general consumers. Sorry to say that but that's what consumers (who are on BB or are not on BB's) are predicting.

I lost 1/2 of my BBM friends since early this year. That's a hint.

WillieLee

Yes, your subjective opinion trumps actual audited financial information. You better leave a number for RIM to contact you so you can guide them on what they should be doing.

Supa_Fly1

LMAO! well played William, well played.

123berryaddicted

I've lost the odd friend this year from off of my bbm list, but something I've noticed about everyone of these people:
1) They didn't use bbm much anyway
2) They didn't and still don't communicate much
3) They don't respond to txt messages very often with their new phone - heck! I don't even know if they're getting my text messages
4) Last but not least - they all like the iPhone fart app.

Nuff said.

bahandi

Because you and your friends make up the RIM market... Sheesh... Go get an iPhone and stop your whining. At least then, you'll be part of the "cool crowd."

Blain158

Let's Keep it up Rim!! Now Promote the Playbook hard and then move on to some QNX based smartphones!

BluCheze

I really don't know what they are doing right. While numbers sound great and all, it loyalty is completely falling apart.

thymaster

How is loyalty falling apart? Yes there will be customer that will leave Blackberry because they don't understand the OS and at the same time I see iPhone customers migrating to Blackberry because it's not a practical phone.

my.usernamegoeshere

We are phone geeks, therefore we want the latest and greatest but most customers just want a cheap [smart]phone.

If you travel around most third world countries or emerging markets as they are sometimes called you'll see that Blackberries are at the top of the food chain.

Culex316

Very true..take for instance my home country in Central America, Panama, (which is not third-world by any means) but over there, due to its relative affordability, Blackberry is all the rage, and a good way to keep in touch with family via BBM.

Hell, they even offer prepaid BIS plans, since most everyone uses prepaid over there.

Aalejandro

Yup to continue on this The Entire Caribbean is Blackberry Land , as the above poster mentioned they offer BIS on prepaid service and don't think RIM is dumping old stock in these places Bold 2 and The Torch are the most common phones as people change BB's very regular due to no contract being in place

Joneser2006

With these numbers we wonder why RIM isn't in a hurry to improve their platform or give more info about new devices?

belfastdispatcher

Lol, because those numbers tell us that the platform works the way it is. Only few people care about getting an improved platform, the masses don't like change, they want to pick up a new device and start using it straight away, no new learning to be done.

experiment 626

RIM is doing well globally the same way that Nokia leads in handset sales: By selling millions of cheaper,non high-end devices. Not that there's anything wrong with that..........................

skyboxer

Tons of people out there still using dumbphones. They are likely a little intimidated about the availability of a gazillion apps and functions that they feel they will never need or use. Even though eventually a first time smartphone user may want more than a BlackBerry has to offer, it is an excellent choice as a first smartphone. You can get one for not much money, and can use a cheaper data plan if you're careful.
RIM going after this market segment is a smart move and seems to be working for them. Hopefully by the time these smartphone newbies are ready for more than RIM is offering now, RIM will be offering as much or more than the other platforms.

fabulous3030

Who cares what the numbers are, all I know is that there phones suck.

belfastdispatcher

If they suck so much how come people are buying them? Rim must be doing something right.

Rootbrian

I'm proud, also proud to be a CB user and loving my 9700. RIM's doing fine despite the trolls/hators setting people on virtual fire lol

GO RIM GO! (coming from an ex-windows mobile/ce convert)

benhmadison

This article is great news! I am very glad to see RIM doing well. Its very simple why they succeed and will continue to do so. Their devices just work. Last month my Bold was destroyed by my dog and my friend convinced me to try a droid. Its a cute toy. It is worthless for the things I need most. A good calender, easy typing for text and email, and the battery life was awful. I had to charge it every 3 hours. Bottom line when I got rid of the droid and got my hands on a new Bold, I felt like kicking my own ass for ever straying away. Rims is the best because of ease of use, superior email and messaging, and battery life. Still unmatched by droid or Iphone.

kishanthj

This is funny. I dont understand the fact that some people come on here saying RIM sucks this and that leaving stupid comments.

Why do you waste your time reading all this and signing up for CB and talk smack.

You trolls make me laugh.

RIM sales are dropping in North America but still lead smartphone sales globally. They are looking at the big picture afterall they are a corp.

I am looking for new changes to the BB, just some hardware upgrade, new os. Thats all they need. Shouldnt mess with the form factor of the phone. Thats what makes a BB.

squished18

I think the thing that drives the trolls a little nuts is the thought that there a people in the world that appreciate things in life a little different in life than they do, and in some ways the other ways are better. Most BB users are reasonable folks that appreciate that there is entertainment value in the iPhone, and some brute force processing power and flexibility in Android. We just love the superior focused person-to-person communications ability of BB. (Hey isn't that what a phone is for?)

There's been room in the world for Toyota, VW, Ford, BMW, Subaru, Honda, and maybe even a little GM and Fiat/Chrysler. You would think there just might be more than one successful smartphone company as well.

HTC_Droid_EvO

LOL @ because they had a increase in % they MUST and or HAVE to be doing something right..

Jackass 3D made more money than the Social Network and probably True Grit, does that mean the level of attention in Jackass was greater and more meaningful.

No jackass....get it "jackass"

:)

belfastdispatcher

Yes, it does mean they re doing something right, they are catering to the right section of the market, same as Jackass