RIMM Disappoints On Revs, Guidance

Thursday, March 24, 2011

BlackBerry maker Research In Motion (RIMM: 64.0875 +1.9675 +3.17%) beat its fiscal 4Q EPS estimates by 2 cents per share, but missed slightly on quarterly revenues and offered guidance well below the current consensus. This has sent RIMM shares down nearly 10% in after-market trading.

Research In Motion posted earnings of $1.78 per share in the quarter, topping the $1.76 estimate. But its $5.6 billion in revenues missed expectations for $5.64 billion. Far more damaging, however, was the company’s reported guidance for 1st quarter earnings. It posted an expected range of $1.47-1.55 per share, below the $1.65 consensus.

Shares had been enjoying a moderate upsurge of 3.17% ahead of its earnings report after the bell Thursday, as regular trading on the Nasdaq in general was positive. And analysts had been exceedingly more upbeat about RIMM’s results in the past month — 5 upward revisions had been made in the past 30 days alone, 2 in the past week.

And profit at Research In Motion grew an impressive 32% on strong BlackBerry sales. However, the average sale price dipped to $304 per device — down from $317 a quarter ago and $310 as of the 4th quarter 2010. Strong competition from other smartphone companies and uncertainties regarding Japan’s consumption and component supply due to its earthquake and Tsunami remain major concerns.

Analysts will assess at what point RIMM stock may be oversold during the days to come. Currently, Research In Motion has a Zacks #3 Rank (Hold) and a corresponding longer-term Neutral recommendation.

source :http://www.dailymarkets.com/stock/2011/03/24/rimm-disappoints-on-revs-guidance/

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