RIM Announces 4th Quarter Earnings; Conference Call Takeaways: "Roadmap Will Blow You Away" and Concierge App Mentioned

By Kevin Michaluk on 31 Mar 2010 06:44 pm
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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.

Kevin Michaluk Kevin Michaluk "Founder, Editor in Chief " 3922 (articles) 3291 (forum posts)
30 comments

j.goncalves

Great Job RIM!

Lets keep buying those smart phones

BBThemes

BlackBerry was the number one selling smartphone brand in the United States at the end of calendar 2009

nice one RIM, its not supprising about the `low end` increase as the best selling handset on contract out of ALL phones, not just smartphones, over all UK networks has been the 8520 and its been that way (week on week) since before christmas and it still continues to rule. :)

312

Stock is still down 50% from 2 years ago.

aris20

Sooooo how many Blackberry users are all around the world ?

BlackBerry.est08

I think they mentioned that it's at 41 million? I guess there are more users that have BlackBerry's but no data plan so total BlackBerry's out there could be more?

BBThemes

imagine how many customers are payg with their blackberry phones, or just dont have BIS, i can tell you from mpersonal perspective its a HUGE number percentage wise, id say about once a week i get someone with BIS not on their phone but their on contract in our store, then add to that pay as ya talk users that cant have it and the number starts to really spiral, id be interested to see if they could say `we sold x units, and in that quarter x units got registered` because that deficit would be huge i think

es_bih

As long as you're on some sort of plan you have a connection to the network. You have service books sent to you, and you register the moment you boot it up with a sim card. You may not have access to BIS or BES, but that doesn't mean you're not hooked to the hub. Ohhh reps and their reputation... Reminds me why I never call carrier reps for anything.

StAiChiLLiN

thats alot of new Crackberry Addicts.

mjbesen310

way to go RIM!! good job!!

es_bih

A lot of empty promises... Same shit gets promised each year, and same lack of delivery...

To the person above me with the childish "soooo" comment: 50% drops in stock aren't a, "soooo," they're a concern. At least to anyone with some common sense.

EGerhardt

Is it worth reminding you that we're in the middle of a frankly pretty brutal recession ?

Sure the NASDAQ is almost back where it was, it fell to ~100 IIRC, and its not a huge suprise that companies have had the same kind of fortunes. Even the mighty apple lost half its value by mid 2008 and is only now above where it originally was, and apple has been flogging its brand so hard that its practically bleeding.

As it stands, RIM are doing ok. The haven't done anything special to drive investment since the 8330 so they've stayed still. Yes, today's devices are better, but not explosively so, and it'll take until the next iteration of devices and OS to push RIM back up. Its a competitive sector, and continually getting more so.

BBs are STILL the most used smartphones. Still the industry leaders in security and enterprise use. So don't say they aren't delivering.

312

My browser works perfectly fine.

R1cE

Wanna leak us that webkit?

Oilersboy

blackberry curve is the main reason that put blackberry on top selling smartphone in United States. so what about Canada ??

nydog

Let's please see the 9650 release in the next few weeks for Sprint

wtom95831

I wonder if the concierge app is related to the Viigo acquisition?

jetman1287

The same things are always said by execs...RIM has done little to improve its software in the last 2 years, despite promises it will improve. Laggy, failing AppWorld at a time when apps are thriving...you'd hear about it if it were doing well and we hear nothing.

Lots of people moving to Android...LOTS...let's hope these promises are legitimate.

R1cE

(sigh) they need news that will jolt them out of their chair and do something. Sure they're earning money, but man ALOT of us are dissatisfied with our phones!!

dmevis

Kevin's "takeaways" are wrong as usual. This was a report to stock holders and stock analysts, not a bunch of pre-pubescent phone nerds.

People are buying the lower priced phones (Curves) because they are damn good phones and the more expense phones really do not offer anything more.

RIM has been milking their email supremacy for quite some time, and has not been particularly innovative in the last decade. Now, particularly in North America, there is getting to be real competition, and RIM's future growth is questionable in the face of iPhones, Droid, etc. If you are interested in the future, which stock buyers are, then this is cause for concern.

Like others, I believe that RIM's achilles heel is its software. Too little innovation, too late. The acquisition of a Web Kit company was great... if a year late. I believe that RIM should buy the Palm Web OS, and tack their email technology onto it.

six4seven

I totally agree with the above post. Read an interesting article today about how Palm is dying and is looking attractive for a take-over; RIM and PALM should make a deal, because I, and millions of other Blackberry users are fed up with the lack of innovation in the Blackberry OS and Web browser.

rvinny

I sold RIMM today and will sleep so much better. I've made good money on them in the past but those days may be over. Longtime BB user and now on Android. Not missing my BB one bit. Now if they release a new device the size of the 9000 and better HTML support, I may be back.

blakeberry

It's a year end and quarterly report. These are the types of things one hears at these events. Judging by some of the comments, you would think we are talking about world peace or something. It's a smart phone. That's all. If you like your blackberry, great. If it doesn't suit you, there are more and more smart phone options available every time you turn around. I'm guessing RIM knows this, it's their business. It's up to them to continue to improve the product or they will lose customers. With the introduction and success of the Android, Blackberry users should be hopeful that they will see advancements and improvements. I look forward to see what is coming next and maybe it will be something that I want to purchase.

jbdale

And it all goes back to, if these were the features you were looking for from the get go, you bought a BlackBerry because? Which goes to show a large number of people get a smartphone just to say they have one. Rarely will they ever research what they want/need in a device and go and blow a wad of cash. Then they find crackberry and spew all of their worthless garbage on how the device sucks. They have no one to blame but themselves. Here's an idea, cancel your plan, pay the fee and get what you want. It's a lot less expensive than to continue to pay monthly payments on a device you hate. Morons.

1magine

If you work for the government, a law firm, an aerospace company or other govermnent contractor you MUST use a Blackberry. No other device is cleared for e-mail security (AT THIS TIME). The issue is the huge percentage of these individuals who continue to buy for themselves other devices. Most especially I-pod 'like' devices for the media/fun experience. As that percentage grows and it is exponentially, these users are pushing their respective IT units to look at BES alternatives. From the Pentagon on down - IT departments are pricing, testing and considering moves from BES. When this happens, whether you love your Berry or not, the BB experience will be dead. For most BB users, we like, some even love the BB experience, but want to see a few changes made so that we need not carry 2 devices. Many of us have been calling for these changes for years. Not only because we want an intuitive media experience, or decent games to play on a long commute, but because we want to see the company and the BB experience survive, grow and thrive.

The truth is the OS is still plagued by inconsistancies in operation; truncated e-mail; download caps; poor memory utilization/shortage; and a host of technical issues related to the Java environment.

Conde Nast is not the first, nor will they be the last of the larger firms who have decided to move away from BES next month.

So, call people morons all you want. But the truth is, change happens. Either you can shape it in a positive way, or you can act like the knuckle dragging, slack jawed, yokel who wants to know why his radio box, now gots to have movin pictures.

RIM can and should survive and thrive. But it needs to change....and quickly. It needs to be out in front of where the market is going. Even if you don't like where the market is going, you would have to be a vegetable to NOT see where it is going. If RIM doesn't, I imagine the BB experience will be lost. I imagine someone reading this thinks I am an alarmist, who does not understand that RIM will change. To them I merely point to reports that the GAO is currently looking at alternatives to BES. Imagine what occurs the day the DOD indicates another platform can provide sufficient encryption and security at a lower price.

jginel

RIM should go back to its roots... The BB is for mobile professionals who rely on email and a phone - period. It's not supposed to be fun, so if "fun" is where the money is, then I guess they lose. If utility is more important, then RIM wins hands down. They need to focus on the original form factor of the Bold and apply all of the upgrades of the 9700 to that device. I've used the other platforms in the past and BB has been my unit for the past 4 years. They just seem lost right now by trying to please everyone. Just carve a niche and rake it in... JMHO.

iwannalearn2001

Doesn't look too good for RIMM here!

"Research In Motion was cut to sell from neutral by Goldman Sachs, which said its products will increasingly lose differentiation as the focus shifts from email, where RIM leads all competitors, to applications, where RIM lags both the iPhone from Apple and Android, an operating system of Google . With its North American business already in decline, the broker doesn't expect international strength to be enough of an offset."

Directly quoted from Foxnews, Technology section.

TheEdge

I guess i'm not the only who thinks RIM will slowly and slowly lose marketshare in the next few years.

I predict they will end up where the started; attraction will only be having the strongest email security for corporates / govts.

Commercial consumers? No way in the near future. It's a long tiresome and losing game. They might as well focus on professionals and leave the general consumer to Android and Iphone... if they don't do this, they will falter for sure.

germann1

Outstanding. Keep making and supporting great products.