This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

RIM Gets a Prudence Payoff

When Research In Motion (RIMM) and Palm (PALM) reported their quarterly results on Thursday, they had lot of similar things to say.

The two companies, which each essentially offer enhanced cell phones, both posted better-than-expected numbers for the latest quarter. And they both posted strong gains of new customers.

Both companies have come under intense scrutiny in recent months and have seen their stocks slide as a result. Potentially feeding into investor skepticism, both companies warned Thursday of potentially disappointing results in the next quarter.

However, they both projected results will pick up in subsequent quarters as they rollout new products.

Despite all the similarities, the market's verdict was anything but similar. In recent trading on Friday, shares of RIM were up about 5%, while Palm's stock was off nearly 12%.

To be sure, there were some differences in their reports. While RIM's current-quarter guidance range was only slightly under the Street's consensus at its midpoints, Palm's fell far shy on both the top and bottom lines. Still, Palm offered a fairly specific forecast for its full year that was above expectations, while RIM didn't offer any kind of numeric outlook for coming periods, simply offering qualitative assurances that its business was "going great."

But the difference seemed to be in how investors and analysts interpreted the companies' expectations. RIM was given a pass for prudently underpromising, while analysts argued that Palm's report raised questions about whether it really could meet its bullish outlook in coming periods.

RIM's management is "deliberately being very conservative," says Chyanne Fickes, a portfolio manager with Stone Asset Management, which is long RIM. Given the recent market selloff of tech and other stocks, "clearly there's no upside for any company to promise anything that don't know they can absolutely deliver."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
MSFT $43.11 0.00%
AAPL $126.41 0.00%
FB $81.21 0.00%
GOOG $575.33 0.00%
TSLA $200.63 0.00%


DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs