It’s not quite 1 million, but RIM’s BlackBerry PlayBook tablet did reasonably well in the first quarter by selling 500,000 units, alongside 13.2 million BlackBerry smartphones. Besides that, RIM’s first quarter for fiscal 2011 was just about as bad as investors were expecting. Revenue was down 12% from last quarter to $4.9 billion. On top of that, RIM hinted that job cuts are on the way for the company, which is bad news considering their ongoing acquisition spree. Balsillie didn’t want to call the layoffs “restructuring” but rather a “streamlining exercise”. RIM also said that delays caused by carrier testing and unforeseen certification problems has slowed down the launch of BlackBerry 7 devices by a couple of weeks, and will have them missing the back-to-school season, as expected, though the holidays should be unaffected. Here’s the highlights, according to their press release.
- Revenue in the first quarter of fiscal 2012 grew 16% over the same quarter last year
- International revenue in Q1 grew 67% year over year
- Gross margin in the quarter was approximately 44%, slightly higher than expected due to product mix
- RIM launched the BlackBerry PlayBook tablet in North America and shipped approximately 500,000 units in the first quarter
A little outside the usual format, both co-CEOs were on the call to address concerns about the roles of both Jim Balsillie and Mike Lazaridis. The two stood fast beside how instrumental their complementary skills helped RIM make BlackBerry what it is today, and though they “understand that weathering this transition has been difficult for our shareholders and our employees”, they maintained strong, consistent leadership is important. They also reiterated that the BlackBerry is the ultimate communications device – take that as you will. In any case, they showed no indication of changing the leadership structure. Their talk at this point was uncharacteristically heartfelt, while much of the call was the usual scripted stuff. It was clear that they both felt pretty strongly about how the leadership was set up. When asked about if they’ve changed how they divvy up duties, it sounds like not much has changed from usual, and that they’re working harder than ever – “what else can we do to get this kind of opportunity in our lives?” Balsillie asserted that the co-CEO structure allows them “measure twice, cut once”.
The BlackBerry PlayBook is still slated to get stand-alone e-mail and Android application support, but the 4G version with LTE and HSPA+ has been pushed to fall after an expectation for a summer release. As for smartphones, BlackBerry is still set for a transition to the same QNX-based operating system as the PlayBook, but Lazaridis and Balsillie reiterated why they didn’t make the change right away; it would have left them in 2012 with a gap in products, apparently. Despite the aforementioned delays, the timeline for getting multi-core QNX-based BlackBerrys out the door hasn’t changed.
Guidance for the future doesn’t look so hot. They’re expecting $4.2 – $4.8 billion in revenues, and shipping 11-12.5 units, with earnings per share dropping to $0.75 – $1.05 . To top that off, there’s word that RIM’s longtime COO Don Morrison is taking a medical leave. One of the most telling quotes from Balsillie was “Why we do things the way we do may not be obvious from the outside,” which was an answer about the leadership structure, but certainly telling about what’s going on inside RIM.
Investors, how do you feel? Ditching your stock, or buying now while it’s cheap? Full financial information for RIM’s 2011 Q1 can be found over here.
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