NEW YORK (
Research In Motion
brandished a beta version of its
this week. But the beleaguered company's earnings report today likely will overshadow any optimism.
The Canadian firm publishes its second-quarter numbers after the market close, with analysts predicting revenue of $2.5 billion and a loss of 46 cents a share, down from $4.2 billion and 80 cents a share in the
The past 12 months have certainly been eventful for RIM, marked by a CEO change and the effects of delayed product launches and increasingly fierce competition from
iPhone and phones running
Android OS. The BlackBerry maker, which reported a worse-than-expected
, has seen its shares plunge more than 68% since this time last year.
Now, however, expectations for RIM's quarterly results may be "adequately negative," according to Sterne Agee analyst Shaw Wu. "For the first time in a while, we believe consensus estimates may be adequately pessimistic looking for a sizable year-over-year decline in revenue and a big operating loss," he wrote in a note released Tuesday. "With low expectations, we believe there is a fair chance that the company may meet or even slightly beat."
Wu, however, warns that beating Wall Street's estimates would provide only temporary respite from RIM's problems. "While RIM's valuation may appear depressed, we maintain our 'neutral' rating as we continue to be concerned with its fundamentals where competitive pressures from Apple and Google are unlikely to subside and the company faces a major product transition with its new BlackBerry 10 OS."
RIM showed a prototype of its new BlackBerry device, dubbed the Dev Alpha B, at its Blackberry Jam App event in San Jose, Calif., this week. The phone, which runs the forthcoming
, will ship in early 2013.
will be live-blogging RIM's results, starting at 3.45 PM ET:
Still, with RIM in the throes of its
, investors and analysts are clearly concerned about the lack of progress.
"While there has been much negativity surrounding the name for some time, we had hoped over the past 9 months RIM would move in an expeditious manner and make bold strategic changes, comprised of either a transition to software/services model, an outright sale, or monetizing a portion of its portfolio/patents," wrote Amitabh Passi, an analyst at UBS, in a recent note. "However, meaningful change has been limited with RIM continuing to stake its future on BlackBerry 10."
Passi, who also has a "neutral" rating on RIM, warns that the firm's "niche advantage" in the enterprise smartphone market is eroding quickly. "We believe there is still a case for the sum-of-the-parts to be greater than the current market price, but time is of the essence," he added.
Earlier this year,
readers said that the Waterloo, Ontario-based firm should
. Amid chatter that RIM would make
, 43% of respondents to
poll said the firm should put itself on the block. Some 18% replied that the gadget maker should carve off parts of its business.
Tellingly, just over 15% of readers said RIM CEO Thorsten Heins should execute a turnaround plan, highlighting the lack of confidence in the company. A similar number of respondents said RIM should liquidate itself.
There was even a rumor during the summer that
was interested in acquiring a RIM division that operates a network of secure servers supporting BlackBerry users, although this was likely way
As for RIM's second-quarter numbers, Sterne Agee's Wu says the firm's cash position will be crucial. "Arguably the most important metric will be its cash balance, which stood at $2.25 billion in the May quarter," he wrote. "There will likely be an operating loss of nearly $400 million, but the question is whether the company can still preserve or even grow its cash balance by collecting on its accounts receivables and changes in working capital."
RIM shares slipped 1% to $6.93 on Thursday, despite the broader rise in tech stocks that saw the Nasdaq gain 1.1%.
--Written by James Rogers in New York.
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