R-I-M Turns Inside Out (RIMM)

Shares are headed south….

The company added a record 4.9 million net new subscriber accounts in the fourth quarter and it now has more than 41 million subscribers.  At the end of the quarter it had cash and cash equivalents of $2.87 billion. Gross margin was higher at 45.7% vs. 42.7% in the November quarter and versus 40% a year earlier

The problem is that the shipments were closer to 10.5 million versus expectations of more than 11 million.  As far as guidance, R-I-M sees Q1 coming at $1.31 to $1.38 EPS and $4.25 billion to $4.45 billion in revenue.  Estimates are $1.22 EPS and $4.33 billion.  It isn’t that the guidance is bad, but that isn’t going to excite anyone after the strong markets we have seen in recent months.

R-I-M closed down 1.2% at $73.97 and shares are down close to an additional 6% at $69.04 in the after-hours session.  The 52-week trading range is $42.76 to $88.08.

Not a good job from R-I-M.

JON C. OGG