Success Anything but Assured in RIM's Turnaround Effort
Despite a shakeup in the executive suite and the pending release of BlackBerry 10 devices, Research in Motion is still leaving many questions unanswered, says Morningstar's Mike Holt.
Research in Motion (RIMM) delivered fourth-quarter results that were slightly below consensus expectations, despite having set an extremely low bar. With few reasons to be optimistic about RIM's ability to rebound from its current uncompetitive positioning, we are maintaining our fair value estimate.
RIM shipped approximately 11.1 million smartphone units during the quarter, representing a 21% sequential decline. Revenue was just $4.2 billion, down 25% year over year as unit shipments tumbled, sale prices declined, and low-end phones accounted for a greater portion of unit shipments. In a sign of how stale and uncompetitive RIM's current phone lineup is, the company took a $267 million inventory write-down and still ended the quarter with inventory 60% higher than the year-ago period.
Michael Holt does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.