RIM Seeks Offensive Rebound

Updated from 7:03 a.m. EDT

Wall Street analysts expect Research In Motion (RIMM) to show sizable revenue and earnings growth when it reports first-quarter results Wednesday. The key question is how much investors will care.

With a long-running patent dispute headed back to the courts and with competitors threatening to curtail the BlackBerry maker's growth, RIM's earnings report and even its short-term guidance may get short shrift from shareholders. Unfortunately for the company, it may not be able to say much about either issue to assuage nervous investors.

"I'm not really interested in what they report," says Chyanne Fickes, a portfolio manager at Stone Asset Management, which used to be long RIM shares but recently sold off its stake. "I think they have bigger problems."

Fickes isn't the only fund manager who has soured on RIM in recent months. A number of long-time bulls on the stock have decided to throw in the towel because of uncertainties in the stock's direction and the company's prospects.

And that attitude seems to be playing out in RIM's stock price. In the year to date, shares in the wireless email device maker and service provider have been off roughly 7% despite the fact that analysts expect the company to continue to post strong results.

The biggest problem for Waterloo, Ontario-based RIM is its legal dispute with NTP Inc., which holds a portfolio of patents covering wireless email systems. Earlier this month, RIM announced the disintegration of a settlement agreement it reached in March with NTP.

RIM is asking that the court system enforce the agreement. But with the dispute returning to the courts, RIM runs the risk of something much worse happening than having to pay the $450 million the company agreed to as part of the settlement.

A district court has already found that RIM infringed NTP's patents, a decision that was largely upheld on appeal. As part of the return to the courts, NTP could again seek an injunction against RIM -- already granted by the district court, but set aside on appeal -- that would prevent RIM from offering its BlackBerry service in the U.S.