Rimm

RIMM Sees Q2 Gross Margins Slightly Below Q1 Level; Says Some Component Suppliers Raising Prices

Research In Motion (RIMM) told investors on the company’s post-earnings conference call this afternoon that margins in its fiscal second quarter ending in August of 50.5%, down slightly from 50.7% in Q1.
The company said the weak dollar is resulting in some margin pressure, noting that many of its component suppliers and outsourcing partners have costs in currencies strong relative to the dollar, and that some of them have passed along the costs in the form of higher pricing to RIMM.
RIMM expects average selling price in the second quarter to climb to $349, from $341 in the February quarter.
RIMM confirmed on the call that it expects to ship the new 3G Blackberry Bold this summer, asserting that it is performing well and meeting the company’s “stringent requirements.”
Meanwhile, the company noted that the first quarter saw a benefit of about 2 cents a share from a lower than expected tax rate.
The company also said it expects total operating expenses to rise 26%-28% in the quarter versus Q1, with R&D up 23%-24% and sales and marketing expense up 28-30%.
In after hours trading, RIMM is now down $12.11, or 8.5%, at $130.23.

Original Source : http://blogs.barrons.com/techtraderdaily/2008/06/25/rimm-sees-q2-gross-margins-slightly-below-q1-level-says-some-component-suppliers-raising-prices/