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Last Update: 02-Dec-11 09:23 ET
Research In Motion announces Q3 provision related to playbook inventory; revises Q3 guidance
Research In Motion issued in-line guidance for Q3 (Nov), saying it sees EPS at the low to mid point of $1.20-1.40 prior guidance range, which compares to the $1.21 Capital IQ Consensus Estimate. RIMM now sees Q3 (Nov) revs of $5.3-5.6 bln vs. $5.3 bln Capital IQ Consensus Estimate. RIMM also issued in-line guidance for FY12 (Feb), saying it sees EPS slightly below the $5.25-6.00 range, vs. $4.67 Capital IQ Consensus Estimate.
Additionally, RIMM announced that it would record a pre-tax provision in the third quarter of fiscal 2012 of ~$485 mln, $360 mln after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge is expected to be predominantly non-cash. The co now believes that an increase in promotional activity is required to drive sell-through to end customers. RIMM is still in the process of finalizing its fourth quarter outlook, and based on preliminary estimates, it expects unit shipments in the fourth quarter to be below third quarter levels.
RIMM said it "is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise."
Additionally, RIMM announced that it would record a pre-tax provision in the third quarter of fiscal 2012 of ~$485 mln, $360 mln after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge is expected to be predominantly non-cash. The co now believes that an increase in promotional activity is required to drive sell-through to end customers. RIMM is still in the process of finalizing its fourth quarter outlook, and based on preliminary estimates, it expects unit shipments in the fourth quarter to be below third quarter levels.
RIMM said it "is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise."
