Shares of RIM stock have taken a beating since the company announced devastating first-quarter earnings last Thursday. The Waterloo, Ontario-based BlackBerry maker missed Wall Street’s first-quarter consensus, it lowered its full-year guidance, it announced workforce reductions, it confirmed product delays and investors went running for the door as did a top executive. Since the earnings release last week, RIM’s stock has fallen more than 25%. This is bad news for every RIM investor, but two in particular must be especially upset. RIM Co-CEOs Mike Lazaridis and Jim Balsillie collectively own more than 10% of the company, a stake that helped each man achieve billionaire status. Last year, Lazaridis was ranked the world’s 651st richest man by Forbes with a net worth of $1.9 billion, and Balsillie was No. 692 on the list with a net worth of $1.8 billion. Fast forward to today, and neither man can call himself a billionaire any longer. The cheifs’ stake in the company is still worth more than $1 billion combined, but separately, their net worths are now just roughly $800 million a piece. We doubt the employees set to be laid off in the coming weeks and months will shed any tears for the Co-CEOs’ loss, but it’s just another piece of a puzzle that continues to fall apart. Some analysts believe RIM is hardly out for the count, however, and we agree that the company has a bit of fight left in it. If Balsillie and Lazaridis hope to rejoin the billionaire club, it’s time to put those gloves on and start swinging.

Read

Wedge Partners principal Brian Blair on Tuesday issued a note to clients that called RIM’s upcoming virgin tablet offering “dead on arrival.” RIM is set to debut the BlackBerry PlayBook next month and opinions of press, bloggers and analysts have been very polarized thus far. Some think the PlayBook will be well received by the enterprise market, projecting that RIM could sell as many as 6 million units in the PlayBook’s first year of availability. Others, however, are not so optimistic. “[The BlackBerry PlayBook] will be sharply inferior to other tablets on the market and consumers won’t buy it,” Blair told CNBC when asked about his note to investors. “They are targeting it at enterprise but I believe very few will actually roll it out widely.” Blair says that the PlayBook’s need to be tethered to a BlackBerry smartphone in order for users to access email, contacts and the calendar is the biggest disappointment surrounding RIM’s upcoming tablet. He goes on to suggest that the PlayBook could potentially end up costing RIM “hundreds of millions of dollars” in “product development, production and related rollout and marketing costs.”

Read

Research In Motion reported its third quarter earnings Thursday evening, and it beat Wall Street’s estimates in several key areas. The BlackBerry maker’s revenue was up 40% year-over-year to $5.5 billion on record shipments of 14.2 million devices — also up 40% year-over-year. This beat the street’s consensus of $5.4 billion in revenue and shipments of 14 million. The $317 average selling price of RIM’s BlackBerry smartphones beat the street’s consensus of $310, though RIM added 5.1 million subscribers during the quarter, which fell below the street’s consensus of 5.2 million. Total subscriber count was 55 million, however, which is up 49% year-over-year. RIM expects fourth quarter revenues of $5.5 to $5.7 billion and 14.3 to 14.9 devices shipped.

“RIM delivered upside surprise on ASPs and GMs — both key metrics,” wrote Mike Abramsky, Managing Director at RBC Capital Markets, in a note to investors. “Importantly, Q4 guidance calls for Q/Q growth in both revenue and EPS on healthy margins, above street and investor expectations. We believe street estimates should come up tomorrow, given the healthy Q4 guide and likelihood that more analysts reflect PlayBook into their estimates.”

Hit the break for the full press release from RIM.

RESEARCH IN MOTION REPORTS THIRD QUARTER RESULTS

Waterloo, ON – Research In Motion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobile communications market, today reported record third quarter results for the three months ended November 27, 2010 (all figures in U.S. dollars and U.S. GAAP)

Highlights:

• Record BlackBerry® smartphone shipments  of 14.2 million grew 40% over the same quarter
• last year
• Revenue grew 40% over the same quarter last year to $5.5 billion
• Q3 Earnings per share of $1.74 were up 58% over the same quarter last year
• Cash increased by $446 million to $2.5 billion at the end of the quarter

Q3 Results:
Revenue for the third quarter of fiscal 2011 was $5.49 billion, up 19% from $4.62 billion in the previous quarter and up 40% from $3.92 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 15% for service, and 3% for software and other revenue.

During the quarter, RIM shipped approximately 14.2 million devices. Approximately 5.1 million net new BlackBerry® subscriber accounts were added in the quarter.  At the end of the quarter, the total BlackBerry subscriber account base was over 55 million.

“We are pleased to report another record quarter with strong growth in shipments of BlackBerry smartphones leading to record revenue, subscriber additions and earnings. RIM’s business continues to grow and diversify as BlackBerry adoption accelerates in markets around the world,” said Jim Balsillie, Co-CEO at Research In Motion. “With strong results and momentum from our recent product introductions, as well as growing excitement from our partners and customers around upcoming smartphone, tablet, software and service offerings, we are setting the stage for continuing success.”

The Company’s net income for the quarter was $911.1 million, or $1.74 per share diluted, compared with net income of $796.7 million, or $1.46 per share diluted, in the prior quarter and net income of $628.4 million, or $1.10 per share diluted, in the same quarter last year

The total of cash, cash equivalents, short-term and long-term investments was $2.47 billion as of November 27, 2010, compared to $2.03 billion at the end of the previous quarter, an increase of $446 million from the prior quarter. Cash flow from operations in Q3 was approximately $975 million.  Uses of cash included capital expenditures of approximately $300 million, common share repurchases of approximately $133 million, and intangible asset purchases of approximately $45 million.

Q4 Outlook:
Revenue for the fourth quarter of fiscal 2011 ending February 26, 2011 is expected to be in the range of $5.5-$5.7 billion.  Gross margin percentage for the fourth quarter is expected to be similar to third quarter levels.  Earnings per share for the fourth quarter are expected to be in the range of $1.74-$1.80 per share diluted.

Update on RIM’s Board of Directors:
RIM announced today that its board of directors has appointed co-Chief Executive Officers Jim Balsillie and Mike Lazaridis as co-chairmen of the board. John Richardson remains as lead independent director of RIM and will continue to facilitate the functioning of the board independently of management. The board believes these appointments, in conjunction with Mr. Richardson serving as lead independent director, represent an appropriate and effective leadership structure for RIM. RIM also announced today that Jim Estill has resigned his position as a director of RIM due to a business conflict. RIM thanks Mr. Estill for his 13 years of service on the board.

Conference Call and Webcast
A conference call and live webcast will be held beginning at 5 pm ET, December 16, 2010, which can be accessed by dialing 800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the company’s Q3 conference call can be accessed after 7 pm ET, December 16, 2010 until midnight ET, December 30, 2010. It can be accessed by dialing 416-640-1917 and entering passcode 4310313#. The conference call will also appear on the RIM website live at 5 pm ET and will be archived at http://www.rim.com/investors/events/index.shtml.

In the past few days, the Internet has been set ablaze by news of the iPhone’s success, AT&T’s suffering profits because of it, and all the Apple gloaters doin’ they thang. Well, in other news, a particular executive over at Microsoft is taking a cue from Steve Ballmer and is acting all unimpressed after having had a bottle full of Haterade. Robbie Bach, who runs the Entertainment & Devices division of MS, which includes all WinMo devices, says that this sort of thing was to be expected. “Apple had a big launch of a new product, and they launched at scale in a lot of new countries with a lot of new [wireless] operators. This quarter, RIMM is having its big launch, and at some point we’ll have our big launch. We’ll have to see where things normalize,” says Bach. That statement is more or less true, but way to steal Apple’s thunder and be a buzzkill, Robbie! Again, like Ballmer, Bach says that the iPhone is great and all, but WinMo is on far more devices and far more diverse and apparently people prefer having an army of mundane options over one revolutionary device (yeah, we said that, bring it on). Will Apple continue its momentum? What Bach is forgetting is this success hit not just at any time, but during major global economic problems. People are bitchin’ about gas prices but are still buying the iPhone in droves. Think about it. How many people have you seen who couldn’t afford a ham sandwich rockin’ iPhone 3Gs? Exactly.

Read

Analysts had a field day on Friday after RIM released its less than stellar Q2 earnings on Thursday. When addressing its future prospects, RIM warned that its gross margins in the Q3 will drop another three percentage points to 47% and that a further decline is likely into 2010. Ouch! In a letter sent to clients, Charles Wolf of Needham & Co had the most scathing assessment of RIM:

In their conference call, management dismissed the notion that new competitors, most notably Apple’s iPhone 3G and new smartphones running on Google’s Android platform, would materially slow the growth in new subscriber activations. We continue to believe that the company has its head in the sand. Yes, the iPhone and Android phones will expand the market as they lure mobile phone users to smartphones. But we believe it’s delusional to think they won’t cut into BlackBerry sales as well, especially in the consumer market.

Did he just call RIM delusional and say they had their head in the sand? Yes, indeed he did. The not-so-rosy forecast for RIM had an effect as its stock fell 28% by days end. Yikes, looks like RIM is suffering the consequences of venturing out of their comfortable enterprise market and entering the highly competitive consumer market. Congratulations, RIM, you just got your first royal smackdown!

Disclosure: I’m eagerly awaiting the Storm on Verizon.

Read

It looks like RIM is one of the first to announce not-so-great news about its second quarter performance, but will it be a continuing trend in the mobile industry in general? We discussed this before and all you readers chimed in, but no one expected it to come so soon. Research In Motion (RIMM) has missed its forecasted earnings by $20 million and Earnings Per Share by a penny. It’s currently down over 20% in after hours trading at the time of this post. With the delay of launching the Bold in the U.S., the Pearl 8220 somewhere on the horizon, and the Storm arriving before Thanksgiving, will it be possible to gain a little boost in the number of net subscribers?

Read