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RIM’s Q1 2013 Financials and Delay of Blackberry Ten

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RIM’s Q1 2013 Financials and Delay of Blackberry Ten
[ Business]

Research in Motion just released their first quarter fiscal 2013 results for the three month period ending June 2nd. As you might have expected, the news is not great and it truly reflects their struggle to stay afloat in the extremely competitive smartphone marketplace.

The big news from the release is the push back of the BlackBerry 10 release. While we have been patiently expecting the first BlackBerry 10 device to roll out sometime before the holidays, they are now saying we won’t see anything until somewhere in the first three months of 2013.

Thorsten Heins, President and CEO of Research in Motion comments on the BlackBerry 10 release date:

“RIM’s development teams are relentlessly focussed 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,”

“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.”

First Quarter Fiscal 2013 Highlights:

* Cash, cash equivalents, short-term and long-term investments increased to $2.2 billion at the end of the first quarter

* Cash flow from operations was approximately $710 million in the first quarter

* Revenue of $2.8 billion in Q1, down 33% from $4.2 billion in the prior quarter

* GAAP net loss in Q1 of $518 million or $0.99 per share diluted; adjusted net loss of $192 million or $0.37 per share diluted

* Shipments of BlackBerry smartphones were 7.8 million and shipments of BlackBerry PlayBook tablets were approximately 260,000

* BlackBerry 10 smartphone launch now scheduled for Q1 of calendar 2013

* Restructuring efforts underway that will include a workforce reduction of approximately 5,000 employees as part of RIM’s efforts to realize over $1 billion in cost savings, based on RIM’s Q4 FY2012 run rate

* Launched World Tour BlackBerry Jam developer sessions in 23 countries resulting in strong adoption and support by application and developer partners for BlackBerry 10 platform

* BlackBerry App World continues to grow with over 89,000 applications available

* The overall BlackBerry subscriber base continued to grow, and the subscriber base grew in all regions except for North America

* RIM names Steve Zipperstein, former General Counsel of Verizon Wireless, as Chief Legal Officer

Thorsten Heins, President and CEO of Research in Motion comments on the financial results of the quarter:

“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,”

“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.”

First Quarter Fiscal 2013 Results:

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.

Adjusted net loss for the first quarter was $192 million, or $0.37 per share diluted. Adjusted net loss and adjusted diluted loss per share exclude the impact of pre-tax charges of $335 million ($326 million on an after tax basis), which are predominantly non-cash related to the impairment of goodwill.

So obviously, things don’t look that great and I think many were counting on BlackBerry 10 to come and save RIM, but it looks like they will have to hang in there a little longer. Hopefully the huge cuts they are making to their workforce and manufacturing capabilities will be enough to keep them afloat. We’ll keep you up to dat on BlackBerry 10 and RIM’s longevity.

RIM’s Q1 2013 Financials and Delay of Blackberry Ten
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