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The bears had it dead on.
Research In Motion shares are getting absolutely trashed in after hours trading Thursday following the company’s financial report for the fiscal first quarter ended May 28. For the quarter, the company posted revenue of $4.9 billion, up 16% from a year ago, but down 12% sequentially, and below the Street at $5.15 billion. Profits in the quarter were $1.33 a share, about in line with the Street at $1.32. The company sold 13.2 million BlackBerry phones in the quarter,below the previous guidance of 13.5 million to 14.5 million, and about 500,000 PlayBook tablets. Gross margin was 44%, a bit higher than expected due to product mix.
But the good news ends there.
For Q2, the company sees revenue of $4.2 billion to $4.8 billion, well below the Street at $5.46 billion, with profits of 75 cents to $1.05 a share, far below the consensus forecast at $1.40. Gross margin for the quarter is expected to fall to 39%.RIM expects BlackBerry units sales for the quarter to be between 11 million and 12.5 million.
For the full year, the company now sees profits of $5.25 to $6 a share, down from previous guidance of $7.50 a share – which by the way no one on the Street believed. The old consensus was for $6.29 a share.
Meanwhile, the company said it will begin implementing a plan to streamline operations – a plan that will include job cuts. The company also said it will buy back up to 5% of its outstanding common stock.
What’s going on here is no mystery. Much like Nokia, the company is getting steam-rolled by Apple and Android. The BlackBerry has lost its cool, and now it is losing market share at a rapid rate. The PlayBook is a nice device, but it isn’t putting much of a dent in the iPad’s domination of the tablet market. While Research In Motion promises a flurry of new product introductions in the months ahead, it is not easy to envision what they can do to easily stem the tide. And the Street is clearly abandoning the company in droves.
RIMM in late trading is down $5.14, or 14.6%, to $30.19
Update: On the company’s post-earnings call with the Street this afternoon, Co-CEO Jim Balsillie said that “the challenges of the first quarter are continuing into the August quarter. The existing portfolio of BlackBerry products has been in market for close to a year and delivering new products has proven more challenging than anticipated. Delays in the new product introduction time lines by a couple of weeks have excluded us from some of the back-to-school programs we had expected to be part of, which has led to lower-than-anticipated shipments, revenue and earnings in the second quarter.”
http://www.americanenglishconversation.com
http://www.freeenglishconversation.blogspot.com/
http://grammar-help.blogspot.com/
http://freeenglishlessons-denise.blogspot.com/
The bears had it dead on.
Research In Motion shares are getting absolutely trashed in after hours trading Thursday following the company’s financial report for the fiscal first quarter ended May 28. For the quarter, the company posted revenue of $4.9 billion, up 16% from a year ago, but down 12% sequentially, and below the Street at $5.15 billion. Profits in the quarter were $1.33 a share, about in line with the Street at $1.32. The company sold 13.2 million BlackBerry phones in the quarter,below the previous guidance of 13.5 million to 14.5 million, and about 500,000 PlayBook tablets. Gross margin was 44%, a bit higher than expected due to product mix.
But the good news ends there.
For Q2, the company sees revenue of $4.2 billion to $4.8 billion, well below the Street at $5.46 billion, with profits of 75 cents to $1.05 a share, far below the consensus forecast at $1.40. Gross margin for the quarter is expected to fall to 39%.RIM expects BlackBerry units sales for the quarter to be between 11 million and 12.5 million.
For the full year, the company now sees profits of $5.25 to $6 a share, down from previous guidance of $7.50 a share – which by the way no one on the Street believed. The old consensus was for $6.29 a share.
Meanwhile, the company said it will begin implementing a plan to streamline operations – a plan that will include job cuts. The company also said it will buy back up to 5% of its outstanding common stock.
What’s going on here is no mystery. Much like Nokia, the company is getting steam-rolled by Apple and Android. The BlackBerry has lost its cool, and now it is losing market share at a rapid rate. The PlayBook is a nice device, but it isn’t putting much of a dent in the iPad’s domination of the tablet market. While Research In Motion promises a flurry of new product introductions in the months ahead, it is not easy to envision what they can do to easily stem the tide. And the Street is clearly abandoning the company in droves.
RIMM in late trading is down $5.14, or 14.6%, to $30.19
Update: On the company’s post-earnings call with the Street this afternoon, Co-CEO Jim Balsillie said that “the challenges of the first quarter are continuing into the August quarter. The existing portfolio of BlackBerry products has been in market for close to a year and delivering new products has proven more challenging than anticipated. Delays in the new product introduction time lines by a couple of weeks have excluded us from some of the back-to-school programs we had expected to be part of, which has led to lower-than-anticipated shipments, revenue and earnings in the second quarter.”
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