This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Research in Motion Ltd. (RIMM) on April 11, 2007.
Key Investors Issues
- EPS were 99 cents per share compared to 10 cents per share a year ago.
- Net income was $187.9 million compared to a profit of $18.4 million a year earlier.
- Sales were $930.4 million, up from $561.2 million a year ago.
Fourth Quarter Highlights
Revenue was $930.4 million compared to $561.2 million a year ago.
Revenue grew 11% sequentially in line with expectations and grew to 66% year-over-year.
- Earnings were at the high end of previously guided range and subscriber account additions exceeded expectation.
As expected, average device ASPs decreased to approximately $336.
This was due mainly to the percentage of the lower ASP Pearl in the hardware mix.
Monthly ARPU is higher than in the third quarter due to one-time pickup service revenue relating to prior periods that was in the single digit millions of dollars.
The revenue recognition criteria for this item were only met in the fourth quarter. Excluding this, ARPU would have been approximately flat over the third quarter.
Software revenue was $49 million, or 5% of revenue consistent of BES and CAL fees, as well as T-Support contracts.
This is higher than anticipated due to the completion of certain marketing programs as strong performance for T-Support.
- Service revenue was $172 million, or 19% of revenue, up $30 million from the third quarter.
- Other revenues, such as repairs and accessories, were $26 million, or 3% of revenue.
Handheld devices represented $683 million, as 73% of revenue was down from the 75% total revenue in the previous quarter.
This decrease in percentage was due to higher than expected service revenue and a delay in shipment to a couple of carriers scheduled for late in the quarter.
Total devices shipped were 2 million, up from 1.8 million in the prior quarter.
- Sellthrough was strong with approximately 1.75 million devices being activated, which means the company is selling almost two devices for each new subscriber account added.
- Total global channel inventory increased by approximately 250,000 units from carriers to shipments in latter part in the quarter for achieving to keep higher levels of inventory due to strong demand for certain products.
Gross margin was 53.5%, which is above the expected 53%.
- R&D spending was $67 million, or 7% of revenue, in line with forecast.
