Friday, March 25, 2011

RIM (RIMM) Sucks Says Wall Street

Shares of Research In Motion Limited (Nasdaq: RIMM) are getting crunched Friday after mixed fourth-quarter results and disappointing first-quarter guidance.

The BlackBerry maker reported fourth quarter EPS of $1.78, $0.03 above the analyst estimate of $1.75. Revenue for the company jumped 36 percent to $5.6 billion for the quarter, compared to consensus of $5.63 billion.

While the fourth quarter was essentially in-line with what investors had expected, the important first-quarter forecast, which will see the launch of RIM's PlayBook tablet, was disappointing. RIM said it sees earnings of $1.47-$1.55 a share, missing the Street's view of $1.65 a share.

For the full year 2012, guidance was stronger. The company sees earnings over $7.50 a share, compared to the Street's outlook of $6.81. Although the company firmly gave this internal guidance, Wall Street is not convinced that it will achieve this number and believes it will have to come down. Even some of the most bullish RIM analysts see 2012 below this "aggressive" figure.

"With no QNX on handsets until CY12, we think RIM will likely continue to lose share to Android smartphones whose prices are rapidly falling," Detusche Bank analyst Brian Modoff said. "We believe fully-powered Android phones will be available for $100 by early 2012, and this will threaten RIM’s growth in all markets,"

RIM was trading at $57.01, falling $7.08, or 11.04 percent, as of 12:01 PM EDT.




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