Research in Motion earnings: Revenue light, outlook strong; BlackBerry shipments surge

Research in Motion earnings: Revenue light, outlook strong; BlackBerry shipments surge

Summary: Research in Motion's quarter was solid, but fell short of Wall Street's lofty expectations. International sales were strong, but revenue and earnings fell short of expectations. RIM's outlook was upbeat for the first quarter.

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Research in Motion's quarter was solid, but fell short of Wall Street's lofty expectations. International sales were strong, but revenue and earnings fell short of expectations. RIM's outlook was upbeat for the first quarter.

The company reported net income of $710.1 million, or $1.27 a share, up from earnings of $518.3 million, or 90 cents a share a year ago. Revenue was $4.08 billion, up 18 percent from a year ago. The problem: For the fourth quarter, RIM is expected to report earnings of $1.28 a share on revenue of $4.31 billion (preview, statement).

On the bright side, RIM's gross margins of 45.7 percent were well above expectations of 43 percent.

Analysts were consistently raising estimates ahead of RIM's earnings reports.

RIM's outlook called for first quarter earnings of $1.31 a share to $1.38 a share on revenue between $4.25 billion and $4.45 billion. Gross margins are targeted at 44.5 percent.

For the first quarter of fiscal 2011, Wall Street expected RIM to report earnings of $1.18 a share on revenue of $4.3 billion.

In a conference call with analysts, co-CEO Jim Balsillie outlined a few of the company's strong points, including a hint of new hardware expected to further drive growth in the second half of the fiscal year. Balsillie wouldn't say exactly what to expect on the 2011, only saying "If you saw the roadmap, you'd be blown away."

Does that mean we'll finally see a decent touchscreen Blackberry?

Balsillie wasn't giving up anything about the roadmap but continued to talk about it throughout the call, calling it "really quite amazing" and "exciting." He was almost dismissive of any inventory issues, calling them "adjustments" and suggesting to analysts that "to interpret that is any kind of weakness is misconstrued."

Among other areas of interest for the company's growth: teenagers, small businesses, Latin America and, of course, China.

By the numbers:

  • For the year, RIM reported net income of $2.46 billion, or $4.31 a share, up 29.8 percent from fiscal 2009. Fiscal 2010 revenue was $14.95 billion, up 35 percent from $11.07 billion last year.
  • RIM added 4.9 million net new BlackBerry subscriber accounts in the quarter. The total subscriber base tops 41 million.
  • BlackBerry annual shipments were up 40 percent from a year ago to 37 million. Fourth quarter BlackBerry shipments were 10.5 million.
  • RIM ended the quarter with cash, short- and long-term investments of $2.87 billion.

Shares were off in afterhours trading on the mixed results:

Topics: BlackBerry, Banking, Enterprise Software

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7 comments
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  • Still alive and kicking

    Despite three years of the iPhone onslaught, RIMM is still alive and kicking. Despite the (alleged) superior OS, look and feel, apps, cool factor, etc, blah, blah, RIMM is still alive. Despite all the predictions by Apple fanboys that all of the competition would go off and die, competition is doing just fine. Just goes to show that Apple fanboys just can't see past their own bias.
    mstrsfty
    • onslaught

      it is not only the iphone onslaught. also the android (and to a much
      lesser extent the webos) devices. for any reason rim is defying gravity.

      people obviously still love to buy hard to use devices with tiny screens,
      an ancient os and millions on tiny plastic buttons glued all over it.

      i don't get it. what is it? the unified inbox?
      bannedfromzdnetagain
      • Blackberry... the scoop

        Here is why Blackberry continues to be a success.

        1) Excellent Phones. As in..Phone First, computing device second. My Blackberry Tour is the best PHONE I have ever owned. Voice calls sound better than my land line at home.

        2) Stable. Never crashes.

        3) Beyond easy to use. Unless you are a complete idiot...easier to use than iPhones and Droids. Why? MENUS. Lists of functionality. This is a timeless concept, not an outdated one.

        4) Physical keyboard. Awesome ones at that.

        5) Full Exchange compatibility. It sets up automatically, and is perfectly configured in moments. You never think about it again, calendar items, email.. instant messenging..texts.. all handled perfectly.

        6) Swappable battery, expandable memory..

        7) Full Desktop sync and backup.

        8) More apps with each passing day...good ones... not junk... business apps.. some games..

        Wake up... A Blackberry (to borrow an Apple phrase) "Just Works"
        condelirios
        • Re:-8) Business Apps- not junk.

          Let's get down to business:-

          http://appworld.blackberry.com/webstore/search/fart
          hill60
  • Right... so let me get this straight.

    RIM sold over 40 million smartphones last year - which, I believe is 60% more units than the iPhone - and you guys are writing them off in your ill considered articles?

    Do you even know what you're writing about anymore or has the hype just overtaken you?
    Sleeper Service
    • Just like Nokia

      The average handset price is slipping.

      What is the point of a larger volume of sales if profits are not growing to
      match?
      hill60
    • Latest quarters: RIM: 10.5m phones (40%, increase) Apple: 8.7m (100% +)

      That's pretty close and without an iPhone refresh while Rim has new
      models.

      Note also Apple's 8.7m doesn't count ipod touches. Some analysts say
      iPod Touches last quarter might have equalled iPhones numbers
      RIM numbers of course includes every single phone even low end
      feature phones (not Equal to the 'super phones' like the iPhone or
      Nexus)

      The fact that Apple is approaching RIM is interesting
      as Apple basically only have two models.
      If you count iPod Touches (i.e Total iPhone OS devices)
      Apple has already beaten RIM (in 3 years).

      What interesting to stockholders is unit increase:
      Rim year over year is 40%
      iPhone (not counting iPod Touch) is 100%

      As this is a article on RIM stock
      For added interest go to investing Page like MSN money
      Put RIM and Apple I year stock price up on same graph
      Compare.
      Davewrite