RIM 4th Quarter Results

RIM announced their Year-End and Fourth Quarter results today, which you can read on the press release below the break. All in all it was a solid year for RIM when you look at the year over year growth in sales and subscribers, but the stock got beat up a bit in after hours trading as investors expectations were even higher. The two surprises here were the product mix being sold (higher % of lower end devices sold than expected) and that the carriers used this quarter to blow out more of their inventory from their channels.

On the investors conference call, RIM remained very optimistic about where they're at and where they're going. International markets are showing great growth and subscriber numbers in North America, where the competition is heating up, are still solid. Obviously RIM can't talk about unannounced or unreleased products, but on more than one occassion RIM's Co-CEO Jim Balsillie told the analysts on the other end of the line that they'll just have to sit tight to see what's coming and that he was happy with the outlook. Balsillie did mention that WES is coming up at the end of April and there will be quite of bit a news surrounding all parts of the BlackBerry experience (so hopefully we'll see device announcements, software announcements, enterprise announcements, etc.). At one point Balsillie said "if you saw the roadmap you'd be blown away" which leads me to hope we'll be seeing a lot of cool stuff from RIM before this new fiscal year is through.

On a funny note, at one point during the call when talking about some of the recent announcements at Mobile World Congress, Balsillie mentioned the the word "concierge app" along with items that had been announced/released. A little blunder perhaps, as of course we have not seen the personal concierge app get released yet or even acknowledge it as an app that will get released. We have seen screen captures of it pop up however though in RIM developer presenations (with some mistaking it as OS 6.0). But let's hope this means we will in fact see the concierge app get released by RIM. It looks pretty cool! Read on for the release.

Press Release

Research In Motion Reports Year-End and Fourth Quarter Results for Fiscal 2010

WATERLOO, ONTARIO--(Marketwire - March 31, 2010) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported results for the three months and fiscal year ended February 27, 2010 (all figures in U.S. dollars and U.S. GAAP).

Annual Highlights:

  • Revenue grew 35% over the prior fiscal year to $15 billion
  • BlackBerry(R) subscriber account base grew 65% over the prior fiscal year to over 41 million, with a record 4.9 million net new subscriber accounts added in Q4 
  • BlackBerry smartphone shipments grew more than 40% over the prior fiscal year to 37 million
  • BlackBerry was the number one selling smartphone brand in the United States at the end of calendar 2009(1) 
  • GAAP earnings per share grew 30% over the prior fiscal year to $4.31 per share diluted

Revenue for the fiscal year ended February 27, 2010 was $14.95 billion, up 35% from $11.07 billion last year. Revenue for the fourth quarter of fiscal 2010 was $4.08 billion, up 18% from $3.46 billion in the same quarter of last year and up 4% from $3.92 billion in the previous quarter. The revenue breakdown for the quarter was approximately 80% for devices, 16% for service, 2% for software and 2% for other revenue. Gross margin for the fourth quarter was 45.7% compared to 42.7% in the prior quarter. RIM shipped approximately 37 million devices during fiscal 2010 and approximately 10.5 million devices in the fourth quarter.

Approximately 4.9 million net new BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 41 million.

"RIM has completed another outstanding fiscal year with record revenue, earnings and subscriber results. Our company and partnerships continued to thrive within one of the most dynamic industries in the world. We managed to significantly expand our international market share while also maintaining our longstanding leadership in North America where BlackBerry continues to be the top selling smartphone brand," said Jim Balsillie, Co-CEO at Research In Motion. "We are off to a great start in fiscal 2011 and expect strong shipments, revenue, subscriber and earnings growth in Q1. We are also very excited about our portfolio of products and services for the coming year and we continue to see exceptional opportunity for sustained growth."

Net income for fiscal 2010 was $2.46 billion, or $4.31 per share diluted, up 29.8% over fiscal 2009. Net income for the quarter was $710.1 million, or $1.27 per share diluted, compared with net income of $628.4 million, or $1.10 per share diluted, in the prior quarter and net income of $518.3 million, or $0.90 per share diluted, in the same quarter last year.

Revenue for the first quarter of fiscal 2011 ending May 29, 2010 is expected to be in the range of $4.25-4.45 billion. Gross margin for Q1 is expected to be approximately 44.5%. Net subscriber account additions in the first quarter are expected to be between 4.9-5.2 million. Earnings per share for the first quarter are expected to be in the range of $1.31 - $1.38 per share diluted.

The total of cash, cash equivalents, short-term investments and long-term investments was $2.87 billion as at February 27, 2010, compared to $2.41 billion at the end of the previous quarter, an increase of $461 million over the prior quarter. Uses of cash in the quarter included capital expenditures of $258 million and the acquisition of intangible assets of $36 million.