Research
In Motion Limited reported third quarter results for the three months
ended November 26, 2011.
Revenue for the third quarter of fiscal 2012 was $5.2 billion, up 24%
from $4.2 billion in the previous quarter and down 6% from $5.5 billion
in the same quarter of last year. The revenue breakdown for the quarter
was approximately 79% for hardware, 19% for service and 2% for software
and other revenue. During the quarter, RIM shipped approximately 14.1
million BlackBerry smartphones and approximately 150,000 BlackBerry
PlayBook tablets.
The Company's GAAP net income for the quarter was $265 million, or $0.51
per share diluted, compared with GAAP net income of $329 million, or
$0.63 per share diluted, in the prior quarter and GAAP net income of
$911 million, or $1.74 per share diluted, in the same quarter last year.
Adjusted net income for the third quarter was $667 million, or $1.27 per
share diluted. Adjusted net income and adjusted diluted earnings per
share exclude the impact of pre-tax charges of $54 million ($40 million
after tax) to revenue related to the service interruption experienced in
the third quarter, $485 million ($356 million after tax) for the
PlayBook inventory provision taken in the third quarter and $7 million
($6 million after tax) for the Company's cost optimization program that
was implemented in the second quarter of fiscal 2012.
Wall Street expected
RIM to earn $1.19 a share on sales of $5.265 billion after Research In
Motion warned on profit, revenue and shipments on December 2.
"Despite the challenges faced in the third quarter, the BlackBerry
subscriber base grew to almost 75 million customers around the world. In
addition, RIM launched a range of new BlackBerry 7 based smartphones
globally and introduced holiday promotions that helped drive growth in
the installed base of BlackBerry PlayBook users," said Jim Balsillie and
Mike Lazaridis, Co-CEOs at Research In Motion. "RIM continues to have
strong technology, unique service capabilities and a large installed
base of customers, and we are more determined than ever to capitalize on
our strengths to overcome the recent execution challenges surrounding
product launches and the resulting financial performance. As part of our
commitment to improving our performance to better meet the expectations
of shareholders and customers, we continue to evaluate ways to improve
in several areas of the Company's operations. It may take some time to
realize the benefits of these efforts and the platform transition that
we are undertaking, but we continue to believe that RIM has the right
set of strengths and capabilities to maintain a leading role in the
mobile communications industry."
(1)
During the third quarter of fiscal 2012, the Company recorded a pre-tax
provision of approximately $485 million, $356 million after tax, related
to its inventory valuation of BlackBerry PlayBook tablets. The charge
was predominantly non-cash.
(2) Cost of sales, research and development, and selling, marketing and
administration expenses included approximately $7 million in total
pre-tax charges, $6 million after tax, during the third quarter of
fiscal 2012 related to the cost optimization program to streamline
operations across the Company. Included in the cost of sales, research
and development, and selling, marketing and administration expenses for
the third quarter of fiscal 2012 were approximately $1 million, $3
million, and $3 million, respectively, of pre-tax charges related to the
cost optimization program.
(3) During the third quarter of fiscal 2012, the Company experienced a
service interruption which resulted in the loss of service revenue and
the payment of service credits in the quarter totalling approximately
$54 million, $40 million after tax, related to the interruption in the
availability of the Company's network.
The total of cash, cash equivalents, short-term and long-term
investments was $1.5 billion as at November 26, 2011, compared to $1.4
billion at the end of the previous quarter, an increase of $87 million
from the prior quarter. Cash flow from operations was approximately $895
million and uses of cash included strategic purchases of intellectual
property assets of approximately $375 million, and property, plant and
equipment expenditures of approximately $205 million.
Q4 Outlook
Revenue for the fourth quarter of fiscal 2012 ending March 3, 2012 is
expected to be in the range of $4.6-$4.9 billion. Gross margin
percentage for the fourth quarter is expected to be approximately 38%.
BlackBerry smartphone shipments are expected to be between 11 million
and 12 million units. Earnings per share for the fourth quarter is
expected to be in the range of $0.80-$0.95.
