RIMM Earnings Out

Tyler Durden's picture

And the numbers are out:

  • RESEARCH IN MOTION 4Q REV. $4.19B, EST. $4.51B
  • RESEARCH IN MOTION 4Q ADJ. EPS 80C, EST. 81C

Terminations:

  • RESEARCH IN MOTION SAYS BALSILLIE RESIGNS FROM BOARD
  • RESEARCH IN MOTION SAYS JIM ROWAN TO LEAVE

No more guidance:

  • RIMM WONT' GIVE QUANTIVE VIEWS DUE TO LONG TERM FOCUS

But here is what the market will focus on:

  • RESEARCH IN MOTION REVIEWING STRATEGIC OPPORTUNITIES

Key excerpts from release:

WATERLOO, ONTARIO--(Marketwire -03/29/12)- Research In Motion Limited (RIM) (NASDAQ: RIMM - News)(TSX: RIM.TO - News), a world leader in the mobile communications market, today reported fourth quarter results for the three months and fiscal year ended March 3, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Highlights:

--  $2.1 billion in cash, cash equivalents, short-term and long-term investments at the end of the quarter, which increased by approximately $610 million in the quarter
--  Cash flow from operations of approximately $1.1 billion, up from approximately $900 million in Q3
--  Revenue of $4.2 billion, down 19% from the third quarter
--  GAAP net loss in Q4 of $125 million or $0.24 per share diluted; adjusted net income of $418 million or $0.80 per share diluted
--  BlackBerry smartphone shipments of 11.1 million in Q4, down 21% from Q3
--  RIM to discontinue providing specific quantitative guidance
--  RIM provides update on organizational changes

Q4 Results:

Revenue for the fourth quarter of fiscal 2012 was $4.2 billion, down 19% from $5.2 billion in the previous quarter and down 25% from $5.6 billion in the same quarter of fiscal 2011. The revenue breakdown for the quarter was approximately 68% for hardware, 27% for service and 5% for software and other revenue. During the quarter, RIM shipped approximately 11.1 million BlackBerry smartphones and over 500,000 BlackBerry PlayBook tablets.

"I have assessed many aspects of RIM's business during my first 10 weeks as CEO. I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM's global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers. I'm very excited about the prospects for the BlackBerry 10 platform, which is on track for the latter part of calendar 2012. Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them," said Thorsten Heins, President & CEO of Research In Motion. "In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM's key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM's assets and maximize value for our stakeholders."

The Company's GAAP net loss for the fourth quarter of fiscal 2012 was $125 million, or $0.24 per share diluted, compared with GAAP net income of $265 million, or $0.51 per share diluted, in the prior quarter and GAAP net income of $934 million, or $1.78 per share diluted, in the same quarter of fiscal 2011. Adjusted net income for the fourth quarter was $418 million, or $0.80 per share diluted. Adjusted net income and adjusted diluted earnings per share for the fourth quarter exclude the impact of pre-tax charges of $355 million which are predominantly non-cash ($346 million after tax) for the impairment of goodwill and $267 million ($197 million after-tax) for an inventory provision taken primarily on certain BlackBerry7 products. These charges and their related impacts on GAAP net income and diluted earnings per share are summarized in the tables below.

Change to Guidance Practices and Outlook:

The company expects continued pressure on revenue and earnings throughout fiscal 2013. Due to a desire to focus on long term value creation and the current business environment, RIM will no longer provide specific quantitative guidance. Some of the factors contributing to this include, ongoing weakness in the Company's U.S. smartphone business, an increased focus on selling BlackBerry 7 smartphones to grow the subscriber base in advance of the BlackBerry 10 launch, increasing competitive pressure in the Company's international markets and the introduction of certain new lower tier service pricing initiatives and a higher mix of sales coming from entry level products.

Organizational and Board of Directors Update:

Jim Balsillie, former Co-CEO of the Company, has resigned as a Director on the Company's Board.

"As I complete my retirement from RIM, I'm grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success," said Jim Balsillie.

"On behalf of the Board and everyone at RIM, I would like to thank Jim for his 20 years of service to RIM," said Barb Stymiest, Chair of RIM's Board of Directors. "His energy, drive and enthusiasm helped build one of the most successful technology companies of our time."

In addition, David Yach will be retiring from his role as CTO, Software after 13 years with the Company and after 4 years with the company and following an open dialogue on the future of global operations, Jim Rowan, COO, Global Operations, has decided to pursue other interests. The Company is currently undertaking a search to hire a single COO with responsibilities to run the Company's operations.

"RIM would like to thank David Yach and Jim Rowan for their years of service and many contributions to RIM," said Thorsten Heins, President and CEO. "We wish them well in their future pursuits."

 

Stock is currently halted and will resume trading at 5:10 pm

Stock resumes trading at around $12.60