BlackBerry just reported their Q1 Fiscal 2014 results and the numbers are in. They reported shipping 6.8 million smartphones without a breakdown for BlackBerry 10. They also increased their cash holdings by $200 million though they did report an overall loss. The interesting thing that stuck out to me is that US revenue is going up and balancing out compared to other regions. BlackBerry stock is going to be on a rollercoaster today since BlackBerry delivered almost exactly what their outlook was last quarter but missed analyst estimates.
Check out the details below or join the call at 8 am ET by dialing 1-800-814-4859 or through your BlackBerry 10 smartphone, personal computer or BlackBerry PlayBook tablet at this link.
BlackBerry Reports First Quarter Fiscal 2014 Results
WATERLOO, ONTARIO–(Marketwired – June 28, 2013) – Research In Motion Limited (doing business as BlackBerry(R)) (NASDAQ:BBRY)(TSX:BB), a world leader in the mobile communications market, today reported first quarter results for the three months ended June 1, 2013 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
Q1 Highlights:
— Revenue $3.1 billion, up 15% sequentially from the previous quarter
— North America revenue grows sequentially 30%, APAC revenue grows 35%,
EMEA revenue grows 9%
— LATAM revenue declines 6% as Venezuela foreign currency restrictions
negatively impact $72 million of service revenue recognition in the
first quarter; company gross margins negatively impacted by 2%
— Shipments of 6.8 million smartphones, up 13% sequentially from the
previous quarter
— GAAP loss from continuing operations of $84 million, or $0.16 per share
— Adjusted loss from continuing operations of $67 million, or $0.13 per
share
— Venezuela foreign currency restrictions impact reported GAAP earnings
and adjusted earnings by approximately $0.10 per share; excluding such
impact, adjusted earnings in-line with previously provided outlook of
approaching breakeven financial results
— Cash flow from operations of $630 million
— Cash and investments balance of $3.1 billion
Q1 Results
Revenue for the first quarter of fiscal 2014 was $3.1 billion, up 15% from $2.7 billion in the previous quarter and up 9% from $2.8 billion in the same quarter of fiscal 2013. The revenue breakdown for the quarter was approximately 71% for hardware, 26% for service and 3% for software and other revenue. During the quarter, the Company shipped 6.8 million BlackBerry smartphones and approximately 100,000 BlackBerry PlayBook tablets.
GAAP loss from continuing operations for the quarter was $84 million, or $0.16 per share diluted, compared with a GAAP income from continuing operations of $94 million, or diluted earnings per share of $0.18, in the prior quarter and GAAP loss from continuing operations of $510 million, or $0.97 per share diluted, in the same quarter last year.
Adjusted loss from continuing operations for the first quarter was $67 million, or $0.13 per share diluted. Adjusted loss from continuing operations and adjusted diluted loss per share exclude the impact of pre-tax charges of $26 million ($17 million on an after tax basis) related to the Cost Optimization and Resource Efficiency (“CORE”) program. This impact on GAAP loss from continuing operations and diluted loss per share from continuing operations are summarized in the table below.
The total of cash, cash equivalents, short-term and long-term investments was $3.1 billion as of June 1, 2013, compared to $2.9 billion at the end of the previous quarter, an increase of approximately $200 million from the prior quarter. Cash flow from operations in the first quarter was approximately $630 million. Uses of cash included intangible asset additions of approximately $335 million and capital expenditures of approximately $83 million.
“During the first quarter, we continued to focus our efforts on the global roll out of the BlackBerry 10 platform,” said Thorsten Heins, President and CEO of BlackBerry. “We are still in the early stages of this launch, but already, the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving themselves to customers to be very secure, flexible and dynamic mobile computing solutions. Over the next three quarters, we will be increasing our investments to support the roll out of new products and services, and to demonstrate that BlackBerry has established itself as a leading and vibrant player in next generation mobile computing solutions for both consumer and enterprise customers.”
Outlook
The smartphone market remains highly competitive, making it difficult to estimate units, revenue and levels of profitability. Throughout the remainder of fiscal 2014, the Company will invest in BlackBerry 10 smartphone launches, and the roll out of BlackBerry Enterprise Service 10, to continue to establish the new BlackBerry 10 platform in the marketplace. The Company will also invest resources to evolve BlackBerry Messenger into a leading cross platform mobile social messaging application, and launch other revenue initiatives associated with new services and emerging mobile computing opportunities. Based on the competitive market dynamics and these investments, the company anticipates it will generate an operating loss in the second quarter. The company will also continue to implement the cost savings and process-improving initiatives it started last year, in order to drive greater efficiency throughout the company, and redirect capital from these savings to areas of investment that will drive future revenue growth.
Reconciliation of GAAP loss from continuing operations before income taxes, loss from continuing operations and diluted loss per share from continuing operations to adjusted loss from continuing operations before income taxes, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations:
(United States dollars, in millions except per share data)
For the three months ended
————————————–
CORE
As Reported: GAAP Charges(1) Adjusted
————————————–
Loss from continuing operations before
income taxes $ (164) $ 26 $ (138)
Loss from continuing operations (84) 17 (67)
————————————–
Diluted loss per share from continuing
operations $ (0.16) $ 0.03 $ (0.13)
————————————–
————————————–
—–
– Adjusted loss from continuing operations and diluted loss per share
from continuing operations include the $72 million (approximately $50
million after tax or $0.10 per share) impact on service revenue
recognition of the Venezuela foreign currency restrictions noted above.
Note: Adjusted loss from continuing operations before tax, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of adjusted loss from continuing operations before taxes, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations enables the Company and its shareholders to better assess the Company’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 measures in the context of the Company’s GAAP results.
(1) As part of the Company’s ongoing effort to streamline its operations and increase efficiency, the Company commenced the CORE program in March 2012. During the first quarter of fiscal 2014, the Company incurred approximately $26 million in total pre-tax charges related to the CORE program. Substantially all of the pre-tax charges are related to one-time employee termination benefits and facilities costs. During the first quarter of fiscal 2014, charges of approximately $10 million were included in research and development and charges of approximately $16 million were included in selling, marketing, and administration expenses.
Supplementary Geographic Revenue Breakdown
Research In Motion Limited (doing business as BlackBerry)
(United States dollars, in millions)
Revenue by Region
For the quarter ended
———————————————————
June 1, March 2, December 1,
2013 2013 2012
———————————————————
North America $ 761 24.8% $ 587 21.9% $ 647 23.7%
Europe, Middle East
and Africa 1,343 43.7% 1,227 45.8% 1,160 42.5%
Latin America 449 14.6% 479 17.9% 535 19.6%
Asia Pacific 518 16.9% 385 14.4% 385 14.1%
———————————————————
Total $ 3,071 100.0% $ 2,678 100.0% $ 2,727 100.0%
———————————————————
———————————————————
For the quarter ended
————————————–
September 1, June 2,
2012 2012
————————————–
North America $ 868 30.3% $ 794 28.3%
Europe, Middle East
and Africa 1,087 38.0% 1,029 36.6%
Latin America 520 18.2% 580 20.7%
Asia Pacific 386 13.5% 405 14.4%
————————————–
Total $ 2,861 100.0% $ 2,808 100.0%
————————————–
————————————–
Conference Call and Webcast
A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-800-814-4859 or through your BlackBerry(R) 10 smartphone, personal computer or BlackBerry(R) PlayBook(TM) tablet at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 10 am by dialing (+1)416-640-1917 and entering pass code 4612565# or by clicking the link above on your BlackBerry(R) 10 smartphone, personal computer or BlackBerry(R) PlayBook(TM) tablet. This replay will be available until midnight ET July 12, 2013.
About BlackBerry
A global leader in wireless innovation, BlackBerry(R) revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Asia Pacific and Latin America. Research In Motion announced that effective January 30, 2013, the Company would operate around the world under the iconic name BlackBerry. The legal name of the Company has not changed, but the Company will do business as BlackBerry pending approval of the official change by shareholders, which will be sought at the Company’s Annual General Meeting later in 2013. Effective Monday, February 4, 2013, the Company commenced trading under its new ticker symbols “BB” on the Toronto Stock Exchange and “BBRY” on the NASDAQ. For more information, visitwww.blackberry.com.
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