RIM Announces Fiscal Q1 Earnings, Delays BB10 Again
RIM announced earnings for their fiscal Q1 today, and also delayed the release date for new BlackBerry 10 smartphone devices. We bring you the story.
RIM (Nasdaq: RIMM; TSX: RIM) announced earnings today for fiscal Q1, which ended June 2, 2012. Sale were $2.8 billion USD, off 33%/ $1.4 billion USD, from the prior quarter. The net loss was $518 million, and another target for 5,000 job reductions was announced. At the same time, RIM announced another delay for the shipment of new BlackBerry 10 smartphones, now expected in calendar Q1 2013, a 90 day delay. Here are some of the highlights:
Revenue for the first quarter of fiscal 2013 was $2.8 billion, down 33% from $4.2 billion in the previous quarter and down 43% from $4.9 billion in the same quarter of fiscal 2012. The revenue breakdown for the quarter was approximately 59% for hardware, 36% for service and 5% for software and other revenue. During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets.
GAAP net loss for the quarter was $518 million, or $0.99 per share diluted, compared with a GAAP net loss of $125 million, or $0.24 per share diluted, in the prior quarter and GAAP net income of $695 million, or $1.33 per share diluted, in the same quarter last year.
“Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful
realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” said Thorsten Heins, President and CEO. “Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel
with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.”
BlackBerry 10 Update
The successful launch of the BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the Company’s number one priority. Over the past several weeks, RIM’s software development teams have made major progress in the development of key features for the BlackBerry 10 platform; however, the integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated. As a result, the Company now expects to launch the first BlackBerry 10 smartphones in market in Q1 of calendar 2013.
“RIM’s development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience,” said Thorsten Heins, President and CEO. “We are encouraged by the traction that the BlackBerry 10 platform is gaining with application developers and content partners following the successful BlackBerry Jam sessions that we have held around the world since the beginning of May. Similarly, the reception of the BlackBerry 10 platform by
our key carrier partners has been very positive and they are looking forward to going to market with BlackBerry 10 smartphones in the first quarter of calendar 2013.”
A net loss on a contraction of revenue is not surprising given the strategic issues that this firm faces, but another delay of BlackBerry 10 until after the all-important Christmas shopping season is not good news. RIM needs to succeed with the BB10 launch, and that product needs to get into the field as soon as possible as competitors continue to develop their platforms. I am starting to wonder if they have what it takes to commercialize BB10 on phones and succeed. It would seem to me that blaming coding issues calls into question the effectiveness of the project management. There is no way around it: this is bad news.
RIM (RIMM on the NASDAQ) closed at $9.13, essentially unchanged. In after-hours trading, RIMM is off $1.56, or 16.99%, at $7.61. The 52 week high for this stock is $33.54, so at $7.61, has lost 78% of its value since hitting that high point.
This story is not over and we’ll continue to bring you updates.RIMM NASDAQ Real Time Quote