Update: market so far seems to be happy with extracting cash from working capital so is squeezing the shorts 8% higher after hours:
[3]
Moments ago Blackberry stock was halted in advance of earnings. Here they are [4].
The good:
- Revenues: $2.72bn, Est. $2.66 bn - beat
- EPS: -$0.22, Est. -$0.35 - beat
- Gross margin: 30.6%, compared to 26.0% last quarter, 27.2% year ago
- Cash increase of approximately $600 million to $2.9 billion; Cash flow from operations was approximately $950 million; bulk of cash, however, appears to have come from Net Working Capital.
The bad:
- Subscriber base: 79 million, down from 80 million
- Phone units sold 6.9 million, down from 7.4 million
- RIM's Chief Information Officer, Robin Bienfait, announces retirement
- "The Company expects that there will be continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter"
Q3 result comment:
"RIM continued to execute on its product roadmap plans and to deliver on key financial metrics as it gets set for the global launch of BlackBerry 10," said Thorsten Heins, President and CEO. "During the third quarter, we continued to demonstrate our strong financial position, generating $950 million in cash flow from operations, and increasing our cash position significantly to more than $2.9 billion. More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products, and beta trials of BlackBerry Enterprise Service 10 are underway at more than 120 enterprises including 64 Fortune 500 companies. This is an exciting time and our carrier partners, application developers and employees are all looking forward to unveiling the innovation and excitement of BlackBerry 10 to our customers on January 30, 2013."
RIM also announced today that Robin Bienfait, Chief Information Officer for RIM has made the decision to retire at the end of this year following 6 years of service to the Company. Robin has committed to continue supporting RIM in an advisory capacity to enable a smooth launch and seamless transition.
Under Robin's watch, the BlackBerry service infrastructure has grown from 47 petabytes per year to more than 33 petabytes per month at the same time as the internal corporate infrastructure for RIM has grown at a remarkable pace. Robin joined RIM in the beginning of 2007 with the mandate to take RIM's BlackBerry data services infrastructure from a single presence in Canada to a distributed model connecting to over 650 carrier partners worldwide. In addition, over this past year, Robin has led RIM's Enterprise business unit focused on enabling services for Enterprise customers and preparing for the launch of the BlackBerry 10 platform. Robin has led a distinguished career. Before joining RIM, Robin held a number of senior leadership positions at AT&T and Bell Labs for over 22 years.
Full outlook:
The Company expects that there will be continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter. The Company intends to continue to consider using pricing initiatives on BlackBerry 7 devices and service fees in some markets as a way to maintain our subscriber base and drive more BlackBerry users. The timing of the BlackBerry 10 launch event for January 30, 2013 could also impact sales of current BlackBerry 7 products as some customers may defer purchasing decisions and wait for BlackBerry 10 devices. All these factors are expected to impact unit volumes, subscribers, margins and service fees. In addition, the company will be significantly increasing its marketing spending this quarter as expected, to support the global launch of BlackBerry 10, and the Company expects to report an operating loss for the fourth quarter. Further details about the Company's outlook will be discussed on the conference call and live webcast to be held beginning at 5 pm ET today, information for which is set forth below.
How much more upside is there in a company which is now trading as if the Blackberry 10, long left for dead, will be the next iPhone.
And at what point will that fundamental equalizer: the broke consumer, who will very soon hit their saturation point when it comes to useless telephonic trinkets, finally start being considered?