RIM s'enfonce, Playbook fait un flop
L'action Research in Motion boit une nouvelle fois la tasse. En cause cette fois: des ventes décevantes de la tablette PlayBook.
L'action du canadien Research In Motion (RIM) abandonnait près de 8% vendredi en Bourse après des prévisions de bénéfice abaissées à cause d'une importante charge liée aux ventes décevantes de sa tablette PlayBook.
Le fabricant du téléphone BlackBerry a averti les investisseurs que ses résultats du troisième trimestre comprendraient une charge avant impôts de 485 millions de dollars américains, correspondant à l'inventaire des tablettes PlayBook qu'il tente d'écouler à grands coups de promotions depuis quelques semaines.
RIM a également indiqué dans un communiqué qu'il abaissait sa prévision de chiffre d'affaires pour le troisième trimestre, au-dessous de son objectif de 5,3 à 5,5 milliards de dollars, en raison entre autres d'une charge de 50 millions de dollars liée à la panne qui a affecté les services du BlackBerry en octobre.
RIM, qui doit publier ses résultats du troisième trimestre le 15 décembre, prévoit que son bénéfice par action pour cette période ne dépassera pas le milieu de la fourchette de 1,20-1,40 dollar qu'il avait auparavant avancée. Le groupe a précisé qu'il ne prévoyait plus "d'atteindre son objectif d'un bénéfice de 5,25 à 6 dollars par action pour l'année".
RIM a consenti des rabais d'environ 300 dollars sur sa tablette PlayBook sur le marché américain ces dernières semaines, ramenant ainsi son prix moyen à environ 200 dollars. RIM affirme avoir vendu aux détaillants environ 150.000 PlayBook au troisième trimestre, mais précise que le volume définitif de ventes aux usagers est supérieur à ce chiffre.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/2/2385754c-1cf5-11e1-a134-00144feabdc0.html#ixzz1fRuxMeao
Last updated: December 2, 2011 7:33 pm
RIM warns of weak demand for PlayBook
Research In Motion, the Canadian manufacturer of the BlackBerry family of smartphones, capped a string of profit warnings with a $485m pre-tax writedown on the value of unsold BlackBerry Playbook tablets, which it said would mean it misses its revised 2012 profit targets
RIM shares slumped more than 9 per cent to $16.85 in early New York trading on the news. So far this year the shares have fallen by more than 70 per cent.
More
ON THIS STORY
- RIM offers mobile management software
- Commentary RIM needs coherent strategy
- Lex Research In Motion
- BlackBerry says sorry with $100 in apps
- New BlackBerry software and services unveiled
IN TECHNOLOGY
The inventory writedown is the latest in a series of setbacks for RIM which has faced increased competition from rivals including Apple andGoogle Android-based smartphone and PC tablet makers, and has struggled to update its own ageing product portfolio.
RIM also took a $50m charge against revenues to cover the extended network outage it suffered earlier this autumn, which left millions of BlackBerry users unable to access the smartphone network for days.
As a result it said it expected adjusted diluted earnings per share in the third quarter to be at the low to midpoint of the previously indicated range of $1.20 to $1.40 per share and no longer expects to meet its forecast for full year adjusted earnings of $5.25 to $6.00 a share.
The Waterloo, Ontario-based group has reduced its profit guidance in each of the past three quarters, and is due to report fiscal third-quarter results on December 15. In the latest period, it said it sold about 14.1m BlackBerry handsets, in line with its earlier forecast of between 13.5m and 14.5m. But increased competition has steadily eroded average selling prices and eaten into revenues.
RIM has continued to grow outside North America, but has been losing market share to rivals in the US, where a growing number of companies and consumers have been switching to iPhone or Android-based handsets.
As part of its efforts to upgrade its devices, RIM introduced a new operating system when it launched the PlayBook tablet in April. Unfortunately, PlayBook, intended to be RIM’s answer to Apple’s iPad, lacked some key features including the ability to send email directly from the device and was widely panned by reviewers.
Since then PlayBook sales have fallen far short of RIM’s expectations, leading to inventory build-up in the mobile network operator stores and other retail outlets where it is sold. In an effort to clear the backlog, RIM slashed the price of the device last month but still only managed to sell about 150,000 tablets in the third quarter, which ended November 26, down from 200,000 in the second quarter.
In contrast, Apple sold 11m iPads in the latest quarter and continues to dominate both the consumer and corporate tablet market.
The disappointing sales of the PlayBook have led some analysts to speculate that RIM might abandon the tablet market altogether. But despite its lacklustre performance, RIM’s senior management made it clear on Friday that it would not ditch the device.
“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy,” said Mike Lazaridis, co-chief executive.
Analysts said the latest profit warning should come as no surprise, but expressed concern about the tone of the company’s statements. Pierre Ferragu of Bernstein Research said: “What is more worrying, of course, is the profound denial the tone of the release reflects. Although it appears obvious to us that RIM’s current strategy is bound to fail rapidly, the company continues to support it vehemently.”
TECH
|
12/02/2011 @ 2:29PM |3,899 views
Research In Motion: A Warning Even Worse Than It Looked
+ Comment now
Research In Motion shares are taking it on the chin Friday after the company this morning issued a disappointing but fairly modest pre-announcement for the fiscal third quarter ended in November. Revenue will be a little below the bottom end of the previous guidance range of $5.3 billion to $5.6 billion; the company will ship 14.1 million phones, in the middle of the previous guidance range of 13.5 million to 14.5 million. But under the surface, the situation may be even worse than it looks.
Jefferies & Co. analyst Peter Misek notes that on the surface, the numbers RIM released suggest “an okay quarter.” But he adds that “underneath” what they provided was “a very ugly portent of what is coming.” He notes that the company told the Street to expect much lower tablet pricing, as well as weak February quarter phone demand. Misek thinks phone shipments will remain “very weak” at least until the coming QNX/BBX phones launch.
Misek maintains an Underperform rating on the stock, but today cut his target price to $14 from $18, while trimming EPS and revenue estimates.
The analyst now sees February quarter BlackBerry phone shipments of 12 million, down from 14 million, noting that his surveys find that “sell-through continues to decline.
As for the struggling PlayBook tablet – the company is taking a $485 million pre-tax writedown in the November quarter for excess inventory – he thinks the company has about 500,000 units in inventory in the channel and another 2 million internally, of which it is writing off about 1.6 million.
For the February 2013 fiscal year, Misek now sees BlackBerry shipments of 46 million, down from 59 million, with profits of $2, down from $3.21, and well below the Street consensus at $4.76.
Where’s the bottom? Hard to tell, Misek says. “As management is unlikely to undertake any drastic steps, we believe any salvage value scenario is unlikely,” he writes. “We also believe no firm will consider acquiring RIMM until after BBX is launched, rendering book value unhelpful as a floor.”
RIMM is down $1.65, or 8.9%, to $16.93.
Thoughts from RIM's Q2 Financial Results Conference Call
119
Tonight RIM posted Q2 financial results that disappointed investors enough to send the stock tumbling close to 20% in after-hours trading. Since I covered the stock as an analyst in the financial community dating back to 2000, Kevin asked me to share my perspective on the results with CrackBerry Nation. So here goes.
The Reported Numbers
Q2 revenue was $4.2 billion, which is at the low end of the guidance that RIM had provided on last quarter's conf call. Earnings, expressed as EPS (earnings per share), was $0.80 while Wall Street expected $0.87. Another miss.
Gross margin also came in a tad under the company's guidance of 39%. No big deal, but guidance for the upcoming quarter is what really bugs Wall Street. More on that in a bit.
I think the reported numbers were disappointing. RIM should have been better prepared to issue more conservative guidance after missing expectations for the last few quarters. Apple, for example, has a strong history of issuing very conservative earnings guidance and then beating expectations. I can't even begin to tell you how many large institutional investors have expressed their frustration on this.
But the real focus is on what's coming
Wall Street tends to pay more attention to forward-looking guidance than what happened last quarter. Makes sense, right? Focus on the future, not the past ...
So, RIM actually provided a pretty good revenue outlook. They expect $5.3 to $5.6 billion in revenue. Analysts expect the low end of that range. I think that most analysts don't realize just how high the wholesale prices are for BlackBerry 7 devices. Seeing "average selling price" (ASP) rise, should tell analysts that RIM has a way to compete effectively in the market. At least that's my opinion.
But revenue doesn't tell the whole story. If revenue beats expectations, shouldn't earnings be stronger too? RIM only expects to post between $1.20 and $1.40 in EPS next quarter. Wall Street expects $1.36. So if you are an analyst, you see a disconnect between revenue and earnings. Revenue is rising faster, which can only mean costs are also rising faster.
As it turns out, gross margin is falling. RIM expects margin to drop to 37% next quarter. This was a definite source of confusion among analysts and investors. In my opinion, RIM could have walked people through the issues in greater detail.
Here's what I think is happening. The Playbook is getting discounted because they just aren't seeing the sales they expected. RIM eats that discount entirely, hurting margins. Management did confirm on the call that BlackBerry device margins (ex-Playbook) are at least flat, if not up in Q3. That's a good sign.
Why is the stock taking such a beating
Wall Street is sick of seeing RIM over promise and under deliver. It really is that simple. Remember that RIM originally estimated it could earn over $7.50 in EPS this year. Now, only 6 months later, that figure has been revised lower to about $5.25. This kind of result breeds negativity.
Also remember that RIM stock had rallied from the low $20s (just prior to the BlackBerry 7 launches) to the low $30s prior to the earnings report. Wall Street was catching on to the idea that BlackBerry 7 is a hit among customers. There was a certain level of expectation that RIM would deliver very strong numbers, not weak numbers along with mediocre guidance for next quarter.
Full year 2012 earnings guidance tells an interesting story
RIM had established an EPS (Earnings Per Share) guidance range of $5.25 to $6.00 last quarter. This quarter they're saying they will hit the lower end of that range. Let's do some math on this.
In Q1 and Q2 so far, RIM has delivered a total of $2.13 in EPS. The forecast for Q3 adds another $1.30 (mid-point of guidance range). That adds up to $3.43. Unless my BlackBerry Calculator is broken, this means RIM has to achieve $1.82 in the final quarter of the year.
Just to be crystal clear about this, EPS of $1.82 would be a record quarter for the company. Kinda throws a monkey wrench into the "RIM is a dying company" argument, doesn't it? Last time I checked "dying" and "record earnings" don't go hand in hand.
But they have to actually deliver on this promise, and let's face it - their track record for delivering on guidance has been pretty brutal lately. That said, Q4 is the February-ended quarter and includes the massively important holiday season (but not Black Friday). RIM has always seen a pretty good uptick in sales and earnings during the February quarter.
For investors, this means you have to wait 13 weeks before RIM either re-confirms this guidance on its next conference call, or revises its estimate lower. Personally, with the stock back in the low 20s as of Friday morning (based on Thurday night's after hours prices), I'm more likely to buy stock than sell. But that's just me. Do your own research please! I've been wrong plenty of times before.
BlackBerry 7 strength is key
I think a big part of RIM's confidence in the final half of their fiscal year comes down to the strong customer response from BlackBerry 7. We knew things were going pretty well, but now we have some numbers from RIM to back it up.
"Sell through" is a term used to describe devices that are sold to end customers, as opposed to "sell in", which is devices that are sold into the channel (carriers, retailers). RIM disclosed that 35% of North American sell through came from BlackBerry 7 devices in the final week of Q2. That's a good sign. It means BB7 is ramping fast.
Here's another important set of sell through numbers: There were 13.4 million devices sold in Q2 versus 13.3 million in the prior quarter. Yes, that's an increase. Not exactly earth shattering growth, but not too shabby considering that BlackBerry 6 devices fell off faster than they had expected. What this tells me is that, again, BB7 is doing very well.
And the risks remain the same ...
Even if the BlackBerry 7 launch is the most incredible launch in RIM's history, it really doesn't prove that RIM will remain a long term player in the smartphone market. To prove this they need to make one more major transition over to QNX. As a shareholder, I'm optimistic,but not willing to close my eyes and hope for the best.
QNX devices will come out sometime in early 2012. For the record my bet is calendar Q2 (meaning April or later). So we'll be waiting a while. But the devices are not the only risk. RIM needs to deliver compelling apps, and higher quality developer tools.
I also think RIM needs to completely transform itself into a company that won't settle so far away from perfection. From BBM buddy list problems on upgrades to less-than-ideal user interfaces on app world ...RIM simply hasn't put enough effort into making its products flawless. Nobody is perfect, but they need to shoot for getting much closer.
But given the balance of risks to the business and the current valuation of the stock (which trades at under 5 times earnings as of tonight), I'm hanging in a while longer. If I'm not satisfied with the pace of progress then I'll be selling.
Disclosures: I own shares of RIM, Apple and Google.
Description
As a microkernel-based OS, QNX is based on the idea of running most of the OS in the form of a number of small tasks, known as servers. This differs from the more traditionalmonolithic kernel, in which the operating system is a single very large program composed of a huge number of "parts" with special abilities. In the case of QNX, the use of a microkernel allows users (developers) to turn off any functionality they do not require without having to change the OS itself; instead, those servers are simply not run.
The system is quite small, with earlier versions fitting on a single floppy disk.[1]
QNX Neutrino (2001) has been ported to a number of platforms and now runs on practically any modern CPU that is used in the embedded market. This includes the PowerPC, x86family, MIPS, SH-4 and the closely related family of ARM, StrongARM and XScale CPUs.
As of September 12, 2007, QNX offers a license for non-commercial users.
The BlackBerry Playbook tablet computer designed by Research In Motion uses a version of QNX as the primary operating system.
Middleware, development tools, realtime operating system software and services for superior embedded design
Over the past 30 years, QNX software has become a big part of everyday life. People encounter QNX-controlled systems whenever they drive, shop, watch TV, use the Internet, or even turn on a light. Its ultra-reliable nature means QNX software is the preferred choice for life-critical systems such as air traffic control systems, surgical equipment, and nuclear power plants. And its cool multimedia features have QNX software turning up in everything from in-dash radios and infotainment systems to the latest casino gaming terminals.
Who uses QNX?
Customers rely on QNX to help build products that enhance their brand characteristics – innovative, high-quality, dependable. Global leaders like Cisco, Delphi, General Electric, Siemens, and Thales have discovered QNX Software Systems gives them the only software platform upon which to build reliable, scalable, and high-performance applications for markets such as telecommunications, automotive, medical instrumentation, automation, security, and more.
Full development life cycle support
Through our embedded market specialization and proven expertise, we've become a trusted partner to the world's largest device manufacturers and systems integrators. Developers rely on feature-rich QNX® Neutrino® RTOS and the highly-integrated QNX® Momentics® development suite to accelerate time to market, and our broad range of engineering services such as flexible support programs, professional training, expert consulting, and custom engineering help customers speed every stage of their development cycle.
