RIM: Get Set for More Disappointment
Even the first glimpse of the BlackBerry 10 operating system last month did little to placate the company's long-suffering investors. Then, RIM CEO Thorsten Heins forecast a first-quarter operating loss, further pressuring the company's stock.
Could things get any worse for the embattled Canadian firm? Quite possibly, said analysts.
"We see the situation at RIM continuing to deteriorate from both a competitive and product perspective," explained Credit Suisse analyst Kulbinder Garcha, in a recent note. "Given the limited disclosure around the preannouncement there could be further risks to the downside."Analysts surveyed by Thomson Reuters are looking for RIM to report a loss of 1 cent a share on revenue of $3.11 billion, compared to earnings of $1.33 a share on sales of $4.9 billion in the same period last year. Credit Suisse's Garcha, however, expects RIM's first-quarter revenue to come in at $2.68 billion, weighed down by sales of just 7.2 million BlackBerry devices with an average selling price (ASP) of $209. Consensus estimates are calling for sales of 8.7 million BlackBerrys at an ASP of $224, according to the analyst. During the same period last year, RIM sold 13.2 million of its famous smartphones. "Customer churn and hardware losses [are] likely to continue," noted Garcha. "In spite of the company's push toward a new platform (OS and ecosystem), we believe these efforts may prove too little too late." Rocked by delayed product launches and increasingly fierce competition from Apple's (AAPL) iPhone, Google's (GOOG) Android phones and Microsoft's (MSFT) Windows phones, investors have fled RIM in droves. RIM shares have plunged more than 67% over the last 12 months and are down almost 37% in 2012. Apple, in contrast, has climbed more than 73% and 41%, respectively. Sure, Heins gave a sneak peek of the much-delayed BlackBerry 10 operating system recently, but the technology did nothing to lift the company's stock. On the contrary, RIM's shares closed down almost 6% after Heins showed off the OS at a developer conference in Florida.
TheStreet will be live-blogging RIM's earnings, starting at 3: 45 p.m. EDT.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV