We already knew the folks at Research In Motion Ltd (NASDAQ:BBRY) had plenty to prove at the company’s annual meeting Tuesday, thanks largely to its posting a dismal earnings report two weeks ago that resulted in a one-day drop of more than 27%.
To its credit, the struggling smartphone maker did let investors know the surprise miss primarily happened thanks to foreign currency restrictions in Venezuela, which negatively affected both its GAAP and adjusted earnings to the tune of $0.10 per share.
All told, not including the Venezuela issue, Research In Motion Ltd (NASDAQ:BBRY) also highlighted the fact that its adjusted earnings per share would have otherwise come in at $0.03, or roughly in line with the company’s previous vague outlook of “approaching breakeven results.”
Unfortunately, however, just 2.7 million of the 6.8 million total smartphone units shipped were equipped with the company’s BB10 operating system, or far below consensus analyst estimates of between 3 and 4 million BB10 handsets.
Adjusting our expectations … downward
Of course, the difficulty in predicting Research In Motion Ltd (NASDAQ:BBRY)’s numbers is also a big reason I warned investors last month not to get too excited over an upgrade from Societe Generale, which temporarily sent the stock up more than 6% after the firm said it believed BlackBerry would potentially sell as many as 5 million BB10 units during the quarter.
Going back to Tuesday’s shareholder meeting, though, this is also why we shouldn’t be particularly surprised that Research In Motion Ltd (NASDAQ:BBRY) CEO Thorsten Heins told investors the business has become “difficult to forecast” with regard to many of the typical smartphone-related metrics analysts have grown accustomed to using with more dominant smartphone players such as Apple Inc. (NASDAQ:AAPL) and Samsung.
More specifically, Heins went on to elaborate:
With little visibility in these items, expectations in areas that the company could not guide were significantly higher than the company could have achieved. While many will judge our short-term success on unit sales in a single quarter, we are not a device-only company, [and] creating value for shareholders does not involve being everything to everyone.
In short, Heins effectively told the market: “You’re doing it wrong.”
The thing is, this offers little consolation for Research In Motion Ltd (NASDAQ:BBRY) shareholders who note that 71% of the company’s revenue came from hardware last quarter, and who rightly covet some form of transparency while the company is smack-dab in the middle of its self-described “three-stage plan” to transform itself.
But remember, though Heins rightly asserts Research In Motion Ltd (NASDAQ:BBRY) isn’t a device-only company, remember its competition isn’t, either.
Sure, the Apple Inc. (NASDAQ:AAPL) crew did sell 37.4 million iPhones and 19.5 million iPads last quarter alone, but they also pulled in more than $4.1 billion in sales from their iTunes, software, and services segment last quarter as well. In the end, all that hardware and supplementary digital goods helped drive a quarterly net profit of $9.5 billion for Apple last quarter.
The plan
But while selling hardware to build out a solid supplementary services biz works well for Apple Inc. (NASDAQ:AAPL), Research In Motion Ltd (NASDAQ:BBRY) still insists it can create shareholder value without achieving immediate growth in those all-important BB10 smartphone sales.
