RIM Earnings: Sales, Margins, Income -- You Name It, It Fell

Last Updated Sep 15, 2011 5:31 PM EDT

It's gotten to the point that you might expect a Research in Motion (RIMM) earnings announcement to come framed with a black border. Revenue of $4.2 billion was at the very bottom of the previous quarter's guidance, and blew analysts' estimates as well. Sales were down 15 percent from the previous quarter and 10 percent from the same time last year.

RIM management had crossed its fingers, hoping that the introduction of new smartphones and continued availability of its tablet, the PlayBook, would pull it out of the depths of despair. Not a chance, no matter how much "strong sell-through and customer interest for these new products" that the earnings release quoted Co-CEO Jim Balsillie as seeing.

Things looking grim
Hopes have dimmed among investors and analysts. RIM's stock price has been down 58 percent from the year's high (don't even ask about the all-time high -- too painful to consider). As for the analysts, the Wall Street Journal put together a comprehensive chart that shows actual stock price and consensus price against a colorful background that shows how analysts rated the firm. But the green, yellow, and red shades don't disguise the growing pessimism.

Some prayed that late August sales would provide a boost to the quarter's revenue. And it apparently did, only it would have to be too little, too late. The company said that unit shipments were lower than forecast because of low demand for older models. Here's the unit movement by quarter in a chart using RIM's publicly available data:

No bright spot
Things were even worse with the PlayBook. In the previous quarter, the company shipped 500,000 units, which means the number that went to distribution and retailers, not the number purchased by customers. This last quarter, it shipped 200,000.

RIM says that it expects to sell between 13.5 million and 14.5 million units in the coming quarter. With the holiday season, it should see a bump. But that's not a given. Plus, the only thing keeping sales from falling even faster has probably been low prices, if you look at the change in gross margins in this table from RIM (click to enlarge):

Net income is also falling very quickly. Hmm, better keep the black borders on hand, just in case.


Image: Flickr user HGruber, CC 2.0.
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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.