There was widespread pessimism leading up to the announcement of RIM's results for the quarter ending 28 May 2011, and expectations were largely met.
The bad news for the BlackBerry-maker wasn't so much the results, which fell a bit short of expectations, but the outlook. Revenue was up 16 percent year-on-year to $4.9 billion, while EPS was $1.33 compared to $1.38 a year ago. Analysts had anticipated $5.15 billion and $1.32, respectively. There were 500,000 PlayBook tablets shifted, which was around 100,000 more than expected.
That was the good news. In its outlook for Q2 and the full year RIM anticipated Q2 revenue to be in the range of $4.2-$4.8 billion, with EPS of $0.75-$1.05. Experts were hoping for $5.46 billion and $1.40. RIM's previous full year EPS outlook had been $7.50, but that has now been cut to $5.25-$6.00.
"Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter." said Jim Balsillie, RIM co-CEO.
"RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012."
So, on top of all the competitive pressure RIM's getting at the high end from Apple and Android - especially in the US - it has faced significant delays to its new handsets, which will run the BlackBerry 7 OS. There's also a round of ‘strategic realignment' and ‘streamlining', which tends to ring alarm bells among investors. In pre-market trading RIM's shares were down 15 percent.
Both of RIM's co-CEOs -Balsilie and Mike Lazaridis - sat in on the ensuing conference call and Q&A, which is unusual. You can read the highlights in this amusing live blog from All Things D. One of the main themes was querying the wisdom of launching BlackBerry 7 handsets a few months before introducing a whole new platform based on QNX. It seems that QNX is designed for ‘superphones' while the old BB platform will remain for entry-level and mid-range handsets.
They had to field a lot of questions about the whole co-CEO concept and their management of the company. They insisted they're doing a great job and couldn't do it without each other. Here's All Things D's summary of the end of the call: Translation of last five minutes of call: "‘You know our new products are just so awesome, aren't they, Jim? Boy, they sure are, Mike. And you know what? You're awesome, too.'"
Once more comparisons with Nokia's spring to mind, in so much as RIM is belatedly moving to a new smartphone platform and is in limbo somewhat until that happens next year. This is manifesting itself in the bottom line, but the longer-term concern is how much market share BlackBerry will have lost by the time the new platform is launched.