Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) posted disappointing results for the first quarter with EPS revenues, GM, and handset unit shipments performing worse than expected. However cash flow was better than expected.
BB10 Devices Disappointing
During the fiscal first quarter, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shipped 2.7 million BlackBerry 10 devices, which is 40 percent of the 6.8 million devices it sold. The number was well below Wall Street estimates. There has been no information on how many devices it sold directly to consumers or through carriers. Also, the break out sales between the Z10 and Q10 were not revealed. During the conference call, the smartphone maker disclosed that it had 72 million subscribers, down 4 million from the fiscal fourth quarter.
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Gross margins of 33.9 percent reported by the Canadian firm were below the Jefferies estimate of 39 percent and Street estimate of 38.67 percent. Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shipped 6.8 million units in the quarter, which was less than the expected 8 million by Jefferies and 7.4 million expected by other analysts. Cash flow from operations was $630 million, which beat the Jefferies estimate of -$618 million.
The Waterloo, Ontario based company didn’t give guidance for the next quarter but said that it is expecting a loss in the next quarter, as well. Cost saving measures and process improvementprograms will be continued in coming quarters to make the company more efficient, and the company plans to reinvest the capital from savings to achieve growth in future.
BBRY Plans To Continue Product Development
Chief Executive Thorsten Heins said that phones based on the latest OS 10 will be the catalyst in bringing the company back on the profitable track.
“During the first quarter, we continued to focus our efforts on the global roll out of the BlackBerry 10 platform,” Mr. Heins said in a statement.
Heins said that the company is in initial stages of the launch, but users have started to acknowledge the BlackBerry 10 platform and BlackBerry Enterprise Service 10 as safe, flexible and dynamic mobile computing solutions.
He also said that Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) will increase its investments in product development over the next three quarters in order to launch new products and services. These investments will be made to establish the company as a dominant player in next generation mobile computing solutions for consumers as well as enterprise customers.
Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) will continue to develop Blackberry Messenger and establish it as a social messaging application which can be used across other mobile platforms. Additionally, efforts will be made to generate revenue streams through new services and mobile computing applications.
In pre-market trading, shares were down 17 percent. At 9.30 am, EDT shares were trading at $10.89 on NASDAQ.