Wednesday, March 31, 2010

Research In Motion Earnings

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After Wednesday's close RIMM reported sharply higher earnings for its fiscal fourth quarter but its stock dropped because its revenue fell short of Wall Street expectations. [AHT @ 8pm $70.50] For the three months that ended Feb. 27, RIM earned $710 million, or $1.27 per share [up 37 percent from a year earlier], expectation called for $1.28. However... revenue of $4.08B, while rising 18 percent over the same period a year earlier, was short of the $4.31B expected by analysts surveyed by Thomson Reuters.For the company's current quarter that ends May 29, RIM said it expects earnings per share of $1.31 to $1.38, above analyst expectations.

"We guided a really strong Q1 based on just what is going on now," CEO Jim Balsillie said referring to product launch plans. "If you saw the roadmap you'd be blown away."

Management blamed reductions in inventories held by wireless carriers and lower-than-expected average selling prices for the phones. Those prices are expected to remain low until RIM introduces new BlackBerry models later in the year. In the conference call RIM announced it is developing a new browser and new tools for outside programmers to write software applications that work on BlackBerrys. The browser and apps are two areas in which RIM lags behind Apple. The company benefited from strong international sales during the quarter. International sales accounted for 48% of total revenue for the period. But these markets prefer lower-priced handsets, such as the Curve. Gross margin for the fourth quarter came in at 45.7% -- higher than many analysts were expecting. RIMM appears to be gaining share on an international level, and possibly losing share on a North American basis.

Research In Motion Limited F4Q10 (Qtr End 02/28/2010) Earnings Call Transcript >>LINK

Below is a chart with actual eps & estimated eps along with a trend channel.

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