BlackBerry handset manufacturer
Research In Motion Ltd.
) has reported mixed financial results for the fourth quarter of
fiscal 2013. Despite this, the company surprises with a quarterly
profit in contrast to the Zacks Consensus Estimate of a loss.
Research In Motion currently has a Zacks Rank #3 (Hold).
(*Research In Motion announced that effective January 30,
2013, the company would operate around the world under the name
BlackBerry. From February 4, 2013, the company's ticker symbol
for trading has been changed from "RIMM" to "BBRY" on NASDAQ.
The legal name of the company has not changed, for which the
approval of the official change by shareholders will be sought
at the company's Annual General Meeting later in 2013. During
the time, the company will do business as BlackBerry.)
Fourth Quarter Results in Detail
GAAP net income from continuing operation in the fourth
quarter of fiscal 2013 was $94 million or 18 cents per share
compared with a net loss of $118 million or a loss of 23 cents
per share in the year-ago quarter. After adjusting $20 million of
after-tax charges for Cost Optimization and Resource Efficiency
(CORE) program, the fourth-quarter fiscal 2013 adjusted earnings
per share were 22 cents, reversing the Zacks Consensus Estimate
of a loss of 28 cents per share.
However, total revenue in the reported quarter was $2,678
million, down by a whopping 36% year over year and fell below the
Zacks Consensus Estimate of $2,901 million. Segment wise,
Hardware revenue was approximately 61%, Services revenue was 36%
and the remaining 3% came from Software and other sources.
In the quarter under review, Research In Motion sold 6 million
BlackBerry smartphones including approximately 1 million of the
company's newly launched BlackBerry 10 software-based
smartphones. The company also sold around 370,000 BlackBerry
Playbook tablets. At the end of fiscal 2013, the global
subscriber base of BlackBerry devices decreased by almost 3
million sequentially to a total of approximately 76 million.
Quarterly gross margin was 40.1%, a massive improvement over
33.5% in the prior-year quarter. Quarterly operating loss
was just $12 million compared to an operating loss of $135
million in the year-ago quarter.
During fiscal 2013, Research In Motion generated $2,303
million of cash from operations compared with $2,912 million in
fiscal 2012. Free cash flow in fiscal 2013 was $1,890 million
compared with $2,010 million in fiscal 2012. Cash and marketable
securities, at the end of fiscal 2013, was $2,875 million
compared with $2,111 million at the end of fiscal 2012. The
balance sheet of Research In Motion remains debt free.
Future Financial Outlook
Management expects that the company's marketing expenditures
will increase by nearly 50% sequentially due to global launch of
BlackBerry 10-based smartphones. As a result, the bottom-line
will approach a breakeven financial result in the first quarter
of fiscal 2014.
) iPhone hit the market, Research In Motion and
) have started facing distressing times. The situation further
) launched its Android software and several handset manufacturers
adopted that operating system.
However, the just concluded fourth-quarter of fiscal 2013
ushered some rays of hope as Research In Motion already launched
its BlackBerry 10-based device, which get initial market
traction. We believe that the new device coupled with effective
cost management strategy may revive the company's fortune going
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