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RIM Reports Q2 Fiscal 2012 Results – Ships 10.6 Million BlackBerrys & 200,000 PlayBooks

RIM Earnings

RIM is going to have a field day in the press tonight and tomorrow. They just announced their second quarter fiscal 2012 results and while the numbers are not bad they show a definite slump. They have sold 10.6 million BlackBerrys and 200,000 PlayBooks this past quarter. Revenue is down though they grew the subscriber base to 70 million which is 40% up from last year this time.

The big message in the results report is that BlackBerry 7 sales are expected to rebound next quarter with shipments growing 27-37% over this quarters 10.2 million. As Jim Balsillie says:

“We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year."

Check out the press release here or below. More analysis as it comes!

Research In Motion Reports Second Quarter Fiscal 2012 Results

WATERLOO, ONTARIO–(Marketwire – Sept. 15, 2011) – Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported second quarter results for the three months ended August 27, 2011 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).


  • Revenue in the second quarter was $4.2 billion and service revenue surpassed $1 billion for the first time
  • GAAP net income of $329 million or $0.63 per fully diluted share; adjusted net income of $419 million or $0.80 per fully diluted share
  • The BlackBerry subscriber base grew 40% year over year to surpass 70 million
  • RIM’s largest roll-out of BlackBerry smartphones was initiated with 7 new smartphones launched with over 90 carrier and distribution partners in 30 countries during the latter part of Q2
  • Approximately $780 million was invested as part of a consortium of companies that successfully bid to acquire intellectual property assets from Nortel
  • BlackBerry smartphone shipments in Q3 are estimated to grow between 27-37% over Q2 shipments

Q2 Results:

Revenue for the second quarter of fiscal 2012 was $4.2 billion, down 15% from $4.9 billion in the previous quarter and down 10% from $4.6 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 73% for hardware, 24% for service, and 3% for software and other revenue. During the quarter, RIM shipped approximately 10.6 million BlackBerry smartphones and approximately 200,000 BlackBerry PlayBook tablets.

"We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products. Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models," said Jim Balsillie, Co-CEO at Research In Motion. "We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year."

The Company’s GAAP net income for the quarter was $329 million, or $0.63 per share diluted, compared with GAAP net income of $695 million, or $1.33 per share diluted, in the prior quarter and net income of $797 million, or $1.46 per share diluted, in the same quarter last year. Adjusted net income for the second quarter was $419 million, or $0.80 per share diluted. Adjusted net income and adjusted diluted earnings per share exclude the impact of a pre-tax one-time charge of $118 million for the Company’s cost optimization program that was implemented in the second quarter of fiscal 2012. Details on the cost optimization program are available in the Company’s press release dated July 25, 2011 as well as in Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal period ended August 27, 2011, which will be filed shortly. This charge and its related impacts on net income and diluted EPS are summarized in the table below.

Note: Adjusted net income and adjusted diluted earnings per share do not have any standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted net income and adjusted diluted earnings per share enables the Company and its shareholders to better assess RIM’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP financial measures in the context of RIM’s GAAP results.

(1) During the second quarter of fiscal 2012, the Company implemented a cost optimization program to streamline operations across the organization. The Company incurred approximately $118 million in total pre-tax charges related to the cost optimization program. Substantially all the pre-tax charges are related to one-time employee termination benefits and the identification and elimination of redundant facilities, with the charges included in the relevant line items in the Company’s consolidated statement of operations. During the second quarter of fiscal 2012 pre-tax charges of approximately $13 million were included in cost of sales, charges of approximately $19 million were included in research and development, and charges of approximately $86 million were included in selling, marketing and administration expenses. Additional charges for headcount related costs associated with our cost optimization program may also be incurred in subsequent quarters.

The total of cash, cash equivalents, short-term and long-term investments was $1.4 billion as at August 27, 2011, compared to $2.9 billion at the end of the previous quarter, a decrease of $1.5 billion from the prior quarter. Uses of cash included strategic purchases of intellectual property assets associated with RIM’s participation in a consortium of companies that successfully bid to acquire Nortel Networks Corporation’s patent portfolio, of which RIM’s cost is approximately $780 million, capital expenditures of approximately $285 million, and working capital requirements.

Q3 and FY2012 Outlook

Revenue for the third quarter of fiscal 2012 ending November 26, 2011 is expected to be in the range of $5.3-$5.6 billion. Gross margin percentage for the third quarter is expected to be approximately 37%. BlackBerry smartphone shipments are expected to be between 13.5 million and 14.5 million units. Adjusted earnings per share for the third quarter, excluding the impact of charges related to the Company’s cost optimization program, is expected to be in the range of $1.20-$1.40. Adjusted diluted earnings per share for the full year fiscal 2012, excluding the impact of charges related to the Company’s cost optimization program, is expected to be towards the low end of the previously guided range of $5.25-$6.00.

24 total comments on this postSubmit your comment!
  1. so it didn’t take into account OS 7 sales?

    In the end, we should have expected this. I don’t know why they would have suddenly sold more OS 6 phones than expected… a steeper fall of in OS 6 phones isn’t a shocker

  2. wow… 27-47% growth due to OS 7 sales..

  3. Jim just said OS 7 phones selling very well.

    I think he said 30% of the devices sold in Q2 were OS 7 even though they were only out 2 week!!

    which means OS 6 phone sales SUCKED in Q2

    Man oh man thank god they got out those OS 7 phones in August…

    • Well, to be honest why would OS6 phone sales be good. They released the previous year, no new phones, a lot of OS6 phones were just OS5 phones updated to OS6, so people already had them.

      • Bingo! The BB6 phones were old and stale compared to the competition. Even the iPhone 4 was looking new compared to them.

        According to BBA Brian, they could not have afforded to wait one more month for the release of the new phones!

        Glad to hear there won’t be any low end QNX phones. No low end phones PERIOD!!! Make the best phones. Stop making mediocre stuff — it ruins the BlackBerry name!!!

  4. Ouch! 200’000 PlayBooks is pretty bad. I guess now people will understand why devs don’t release more apps for the platform. It’s pretty difficult to recover the development costs when the user base is so small :(.

  5. Like I said… OS 7 phones needed to stop the bleeding.

    They have.

    Next step.. QNX Phone…

  6. Mike L just admitted apps are the issue with Playbook sales

  7. OS 2.0 not until after DevCon

    I am PISSED

  8. I had said earlier I thought they would wait to do a lot of things until AFTER iPhone 5 launch…. looks like I might be rigth

  9. QNX phones will ONLY be high high end phones. BBOS will continue in developing countries until they are ready for high high end products

  10. The only thing I’m really worried about is battery life on the QNX phones.

  11. For the past 2 quarters when RIM has missed earnings estimates and their stock has been trashed on the market, I think back to the comments posted in the link below from Mike Lazaridis back in April when he said “I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”

    Well the analysts were right. Prior to the latest OS 7 devices, the only new device that was released between August, 2010 and August, 2011 was the Torch 9800. And when I saw it at the launch party in NY last August, I was really disappointed with the specs.

    The lastest OS 7 devices do a lot of catching up in terms of specs but they’re still behind. I know that specs aren’t everything but you need higher specs to support some high end features. When an average consumer is at a mobile phone store and they see devices from HTC, Samsung, Motorola, etc with 8mp cameras, front facing cameras, large high resolution screens, etc side by side with the OS 7 devices, the other devices just look like a much better deal for the same price or cheaper. RIM’s OS 7 devices are selling well right now because all the people who’ve been sitting on the sidelines waiting for a new high end Blackberry (especially those from the CDMA carriers who’ve been waiting for over a year for a new high end Blackberry) finally have some devices to choose from.

    It will be interesting to see how long these strong sales last. I’d say that RIM better release that QNX smartphone by the first quarter of next year or we’ll see their sales and market share go down again after the OS 7 devices have been out for 6 months.

  12. That was one of the concerns of one of the analysts. Besides hardcore fans who are responsible for the strong sales, who will buy these new phones, especially in a month’s time?

    • I think the strong sales will last longer than a month, maybe 3-4 months at most. There’s probably a lot of people out there who don’t even know that there are new Blackberries available so I think it will take a few months for the word to get out to everybody because of word of mouth and advertising. They’ll have decent sales this quarter by the QNX device better be out by February if they want to continue having good sales in the first quarter of 2012.

      I don’t understand how a company like HTC that was much smaller than RIM can crank out tons of new devices with many different form factors yet between August 2010 and August 2011 the only new devices with a different form factor that came out during that time were the Torch 9800 and Style 9670. And during part of that time the CEOs of RIM were basically acting like they had nothing to worry about because they had strong sales and a high stock price. If they had been following the industry at all during the past 15 years then they should know what happened to Motorola after the StarTac and Razr, what happened to Palm after the Treo and what happened to Nokia.

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