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Does Research In Motion Have an Achilles' Heel?

By Bob Faulkner

 About this article:
 Research In Motion announced first-quarter results last night after the close that were in line on the top line and above guidance on pro forma EPS. More important, guidance was at least in line with current Street consensus estimates. Revenue in the quarter was $3.42 billion (up 53% year over year and down 1% quarter over quarter), with GAAP EPS of $1.12 and pro forma EPS of 98 cents (excludes extraordinary gains). The gross margin was 43.6%, in line with guidance and down 710 basis points from last year but up 360 basis points from the second quarter. The operating margin was 20.2%, down 860 basis points year over year and down 100 basis points quarter over quarter. Excluding one-time charges, however, the operating margin was 23.0% and above expectations. Cash from operations was huge, about $615 million vs. only $6 million a year ago and...

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