RIM Reports First Quarter Results – BlackBerry 6 Launching Before End Of September, Over 100 Million Units Sold

By Mauricio

RIM today reported first quarter results for the three months ended May 29, 2010. During the investors conference call RIM expressed confidence in its international growth thanks to carriers showing support with major expansion strategies as well as a general, new product cycle in late Q2. RIM also said they’re expecting a nice turnaround in North America with the release of new products and software. One of the questions I know many of you have waited for is when will BlackBerry 6 be available? Here it is right from RIM’s Co-CEO, Jim Balsillie:

BlackBerry 6 will also incorporate the new BlackBerry WebKit browser with best-in-class efficiency, fidelity and use of navigation. We expect BlackBerry 6 to be available before the end of September.

Here are some of the highlights:

• Revenue grew 24% over the same quarter last year to $4.24 billion
• Earnings per share in the first quarter increased 41% year over year to $1.38(1)
• BlackBerry® smartphone shipments grew more than 43% over the same quarter last year to 11.2 million and RIM shipped its 100 millionth BlackBerry smartphone during the quarter
• BlackBerry subscriber account base grew approximately 60% over the prior year to 46 million, with 4.9 million net new subscriber accounts added in Q1
• RIM’s Board of Directors approved a share repurchase program to purchase for cancellation up to 31 million common shares

For more info be sure to check out the press release after the jump or to listen to today’s webcast/conference call about RIM’s Q1 results click here. Also, if you’d like to read instead of listen to the conference call, I was able to find a transcript of it at Seeking Alpha.

Press Release

Research In Motion Reports First Quarter Results and Announces Share Repurchase Program

WATERLOO, ONTARIO–(Marketwire – June 24, 2010) – Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported first quarter results for the three months ended May 29, 2010 (all figures in U.S. dollars and U.S. GAAP, except where indicated).

Highlights:

• Revenue grew 24% over the same quarter last year to $4.24 billion
• Earnings per share in the first quarter increased 41% year over year to $1.38(1)
• BlackBerry® smartphone shipments grew more than 43% over the same quarter last year to 11.2 million and RIM shipped its 100 millionth BlackBerry smartphone during the quarter
• BlackBerry subscriber account base grew approximately 60% over the prior year to 46 million, with 4.9 million net new subscriber accounts added in Q1
• RIM’s Board of Directors approved a share repurchase program to purchase for cancellation up to 31 million common shares

Q1 Results:

Revenue for the first quarter of fiscal 2011 was $4.24 billion, compared to $4.08 billion in the previous quarter and up 24% from $3.42 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 79% for devices, 16% for service, 2% for software and 3% for other revenue. During the quarter, RIM shipped approximately 11.2 million devices.

Approximately 4.9 million net new BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 46 million.

“RIM achieved significant earnings growth and shipped a record 11.2 million devices during the first quarter, including its 100 millionth BlackBerry smartphone,” said Jim Balsillie, Co-CEO at RIM. “We continue to be focused on growing our business globally and we believe that the range of exciting new BlackBerry products being released in the coming months will create significant opportunities to accelerate RIM’s growth in the second half of the fiscal year.”

Net income for the quarter was $768.9 million, or $1.38 per share diluted, compared with net income of $710.1 million, or $1.27 per share diluted, in the prior quarter.  Net income in the same quarter last year was $643.0 million, or $1.12 per share diluted which reflected an adjustment of $0.14 per share related to certain unusual items that were recognized in the first quarter of fiscal 2010.(1)

The total of cash, cash equivalents and investments was $3.27 billion as at May 29, 2010, compared to $2.87 billion at the end of the previous quarter, an increase of approximately $400 million. Cash flows from operations in Q1 was approximately $1.12 billion, which was offset primarily by common shares repurchased of approximately $410 million and property, plant, and equipment as well as intangible asset acquisitions of approximately $270 million.

Q2 Outlook:

Revenue for the second quarter of fiscal 2011 ending August 28, 2010 is expected to be in the range of $4.4-$4.6 billion.  Gross margin for Q2 is expected to be approximately 44%.  Net subscriber account additions in the second quarter are expected to be in the range of 4.9-5.2 million.  Earnings per share for the second quarter are expected to be in the range of $1.33-$1.40 per share diluted.

Share Repurchase Program:

RIM’s Board of Directors today has also authorized a share repurchase program to purchase for cancellation up to approximately 31 million common shares.  The Company can purchase up to approximately 10 million common shares of the approved 31 million over the Nasdaq Stock Market (the “Nasdaq”) commencing on June 29, 2010. Additional purchases over the Nasdaq or purchases on the Toronto Stock Exchange (the “TSX”) will be subject to regulatory approval. The share repurchase program will remain in place for up to 12 months or until the purchases are completed or the program is terminated by RIM.  In the past 12 months, RIM repurchased 18.2 million shares representing approximately 3% of its outstanding common shares under its previous share repurchase program. The combined repurchases, including the share repurchase program announced today, will represent 10% of the outstanding public float.

The price that RIM will pay for any shares under the share repurchase program will be the prevailing market price at the time of purchase. The share repurchase program will be effected in accordance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934, which contains restrictions on the number of shares that may be purchased on a single day, subject to certain exceptions for block purchases, based on the average daily trading volumes of RIM’s shares on Nasdaq.  Subject to regulatory approval being obtained, any purchases through the facilities of the TSX will be made in accordance with TSX rules, which contain similar restrictions.

The actual number of shares purchased the timing of purchases and the price at which the shares would be bought under the share repurchase program will depend on future market conditions and upon potential alternative uses for cash resources.  There is no assurance that any shares will be purchased under the share repurchase program and RIM may elect to suspend or discontinue the program at any time.

Reconciliation of GAAP diluted EPS to adjusted diluted EPS

During the first quarter of fiscal 2011, there were no unusual charges. The following table reconciles the impact of the unusual charges in the first quarter of fiscal 2010 on diluted EPS:

Note: Adjusted diluted EPS does not have any standardized meanings prescribed by GAAP and thus are not comparable to similarly titled measures reported by other issuers. The Company believes that the presentation of adjusted net income and adjusted diluted EPS 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.

A conference call and live webcast will be held beginning at 5 pm ET, June 24, 2010, which can be accessed by dialing 800-814-4859 (North America), 416-644-3414 (outside North America). The replay of the Company’s Q1 conference call can be accessed after 7 pm ET, June 24, 2010 until midnight ET, July 8, 2010.  It can be accessed by dialing 416-640-1917 and entering passcode 4310298#.   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.

(1) GAAP diluted earnings per share were $1.12 for the first quarter of fiscal 2010 and adjusted diluted earnings per share were $0.98.  Diluted GAAP earnings per share of $1.38 in the first quarter of fiscal 2011 were 41% higher than the diluted adjusted earnings per share of $0.98 in the first quarter of fiscal 2010.  The GAAP diluted earnings per share in the first quarter of fiscal 2010 included the impact of certain unusual items that were recognized in the quarter, including a charge to selling, marketing, and administration expense of $96.4 million relating to the payment of certain employee tax liabilities relating to certain exercised stock options and the foreign exchange impact relating to the previously disclosed enactment of the functional currency tax rules in Canada that became effective in the first quarter of fiscal 2010.  In addition, there was an income tax benefit of $175.1 million primarily as a result of the enactment of the functional currency tax rules.   See attached table for reconciliation of GAAP diluted EPS to adjusted diluted EPS.