Research In Motion Rushes Ahead: Fool by Numbers

On June 28, BlackBerry maker Research In Motion (Nasdaq: RIMM  ) released first-quarter 2008 earnings for the period ended June 2, 2007.

  • Yowza! That's one spicy quarter. RIM managed to beat its own estimates by a very comfortable margin on both the top and bottom lines, despite a significant slip in gross margin.

  • Cost controls and aggressive share buybacks neutralized that threat before it reached the net income line. Fiscal discipline is always good practice.

  • Conservative accounting is another Foolish plus. In this case, that meant cash flow figures zooming past the GAAP income numbers, on the back of massive improvements in working capital balances.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$1,081.9

$613.1

76.5%

Net Profit

$223.2

$128.8

73.2%

EPS

$1.17

$0.67

74.6%

Diluted Shares

190.4

192.1

(0.9%)

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

51.8%

55.1%

(3.3)

Operating Margin

26.2%

26.4%

(0.2)

Net Margin

20.6%

21.0%

(0.4)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$1,168.6

$723.1

61.6%

Accounts Rec.

$718.4

$393.7

82.5%

Inventory

$258.7

$134.4

92.4%

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable

$189.9

$76.0

149.8%

Long-Term Debt

$6.9

$7.0

(1.1%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash From Ops.

$225.3

$99.0

127.5%

Capital Expenditures

$66.8

$44.1

51.5%

Free Cash Flow

$158.5

$55.0

188.5%

Owner Earnings

$194.2

$111.6

74.0%

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned; nor did he own a cell phone of any kind. Fool rules are here.


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