“RIMM Earnings Report” June 18, 2009

On a conference call with investors this afternoon about May quarter earnings, Research In Motion (RIMM) CEO Jim Balsillie said the company expects to ship between 8.1 million and 8.7 million smart phones in the August quarter, up from 7.8 million in the quarter reported today.

In their announcement earlier, the company said it expects revenue for the fiscal second quarter ending August of $3.45 billion to $3.7 billion, with gross margin of 43%-44%, net subscriber adds of 3.8 million to 4.1 million and EPS of 94 cents to $1.01. The Street has been expecting revenue of $3.59 billion and profits of 97 cents a share. On the call, the company said ASP in the August quarter is expected to be $345, lower than the first quarter due to mix. Operating expenses are expected to be 7%-9% higher than in Q1, with R&D up 8%-9% and sales, marketing and administration expense up 6-8%.

A few other items from the call:

• Balsillie said close to 15 million social networking apps have been downloaded to date from the company’s App World software store. He did not give any data in his presentation on total downloads from the store.
• Asked during the Q&A session on the call about the Palm Pre and the new Apple phones, Balsillie noted that there have been lots offers from carriers to sell the BlackBerry at $49, $99 and in some cases free. He says they are “pretty focused on doing what we have to do.” Balsillie played down the $99 price point on the 8 GB iPhone as a temporary measure for an end-of-life phone. He characterized RIMM’s launch road map for the next 12-15 months as “spectacular.”
• Balsillie noted that 80% of the net new adds in the May quarter were from the consumer side of the business, which one analyst on the call said implied a fairly steep sequential decline in net new enterprise subs.

RIMM in late trading is down $3.95, or 5.2%, to $72.60.

source: barrons.com