Research In Motion Ltd., maker of the BlackBerry handheld device, reports its earnings for the fiscal third quarter after the closing bell Wednesday. The following is a summary of expectations and developments for the period.
EXPECTATIONS: Research In Motion estimated its quarterly profit between 62 cents and 68 cents per share, with sales ranging from $540 million to $570 million. On average, analysts polled by Thomson Financial predict income of 65 cents per share and $549.2 million in sales.
ANALYST TAKE: Analysts say while Research In Motion continues to see sturdy subscriber growth, its future remains clouded by heightened competition and the looming threat of losing a patent dispute with NTP Inc. that could halt domestic BlackBerry sales. Uncertainty surrounding a pending legal settlement likely eroded subscriber trends so far in December, one analyst said. Although many believe Research In Motion will settle quickly and hustle to prevent a shutdown, “it’s inevitable that the uncertainty and resulting damage will allow competitors to gain traction they won’t necessarily lose when the NTP-Research In motion issue is resolved,” Citigroup analyst Daryl Armstrong wrote in a report.
QUARTER DEVELOPMENTS: All eyes have been fixated on Research In Motion’s two-year-old patent suit with NTP. A $450 million settlement fell apart earlier this year, and only recently did the two sides restart negotiations through a mediator. The companies were asked last week to submit court briefs by Feb. 1, and a judge said he plans to make a ruling if no settlement is reached. Meanwhile, the U.S. Patent and Trademark Office is examining NTP’s patents to ensure their validity.
COMPETITORS: Research In Motion’s biggest rivals, while keeping a close eye on whether BlackBerry screens are dimmed permanently, have been pumping out an array of competing devices. Palm Inc.’s Treo smartphone is seeing more interest, though products from Sony Corp., Nokia Corp. and Motorola Corp. are starting to crowd the space.
STOCK PERFORMANCE: Shares of Research In Motion lost 22 percent in the September-November quarter, and are down 24.1 percent so far this year.