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An interesting video above from Gary Krakow and TheStreet.com, in the wake of RIM’s earning reductions and recent distaste for RIM’s latest device offerings. Krakow’s message for those following RIM’s stock? Chill out. RIM’s stumbles are a reflection of industry wide problems and a troubled economy. Although I had to cringe when Krakow and his compatriot brought up Palm as another industry company facing tough times. RIM doesn’t want to go anywhere near Palm country.
|via TheStreet|
When J.P. Morgan cut their earning estimates for RIM last week, it was before the Waterloo company responded in kind, cutting their own Q3 2009 estimates last Wednesday. J.P. Morgan has updated their estimates once again to reflect RIM’s new numbers, expecting the company to report earnings per share of $0.81 on sales of $2.75-billion, unit sales of roughly 6.8 million in the quarter, with average selling prices of $332 and net subscriber additions of approximately 2.6 million.
J.P. Morgan has again trimmed its estimates on Research In Motion Ltd. (RIMM) in response to the BlackBerry-maker’s third quarter profit warning and signs of a broadening global slowdown in mobile handset sales. However, analyst Paul Coster is maintaining an “overweight” rating and told clients that RIM deserves to trade at a premium multiple as a result of its leadership position in an open-ended growth market.
J.P. Morgan’s estimates for fiscal 2009 through 2011 were also cut, with year-over-year unit growth in 2010 reduced from 42.7% to 32.5%. This implies unit shipments of about 37.7 million next year. BlackBerry Cool will have full coverage of RIM’s Q3 2009 earnings report on December 18th.
|via Seeking Alpha|
On Wednesday we told you that RIM had made a $66 million offer to Certicom’s shareholders in an attempt to purchase the encryption software company. The offer had been made directly to shareholders due to stalled negotiations with Certicom management.
Today, we can tell you that Certicom has refused a request by RIM for exclusive buyout talks, and is now inviting offers from other interested parties. Certicom says it has been in talks with other companies about a possible deal but mentioned none specifically. The company has formed a special committee of its board and hired TD Securities Inc. as a financial adviser to consider RIM’s proposal and seek other bids.
RIM is offering no new statements on the matter beyond what was made Wednesday, so we’ll just have to wait and see how it plays out.
Thursday, December 18th will likely be one of the most important days of 2008 for RIM. On the 18th, RIM will report their Q3 2009 fiscal results after market close. Considering RIM’s sliding stock price and their lowered Q3 outlook, the focus may just be on how bad the numbers are.
RIM will hold a conference call and live webcast at 5 pm ET on the 18th, which can be accessed by dialing 800-733-7571 or by logging on at www.rim.com/investors/events/index.shtml. As always, you can expect the live blogging coverage of the conference call you’ve come to expect from BlackBerry Cool.
RIM announced plans today to offer CDN $1.50 a share in cash to buy encryption software company Certicom Corp in a deal worth about CDN $66 million. The offer represents a 76.5% premium over the December 2nd closing price of Certicom stock.
RIM said it is making the offer directly to Certicom shareholders because it has been unable to advance the transaction with management since starting talks in February 2007. The offer is not subject to financing conditions and will be funded by cash on hand, said RIM. It expects to formally commence the offer by Dec 12.
RIM’s offer comes only a day after the Waterloo company cut their Q3 revenue outlook in the face of slowing subscriber growth.
|via Reuters|
RIM today reported certain preliminary third quarter results for the period ended November 29, 2008 (all figures in U.S. dollars and U.S GAAP, except where indicated).
Based on preliminary financial data, RIM expects revenue for the third quarter to be in the range of $2.75-$2.78 billion. Preliminary revenue is lower than the previously forecasted revenue range of $2.95-$3.10 billion but is approximately 65% higher than revenue in the same quarter of last year. Approximately one third of the difference between forecasted and preliminary revenue is expected to be a result of the depreciation of certain foreign currencies relative to the U.S. dollar in the quarter. The remaining difference is primarily due to lower than estimated unit shipments of existing products, which RIM believes is a reflection of general economic weakness in the United States and shifts in product launch dates within the quarter. Subject to final review, gross margin in the quarter is expected to be between 45-46%. The lower than expected gross margin is due primarily to product revenue mix and foreign exchange impacts within the quarter.
Continue reading ‘RIM Reports Preliminary Q3 Results – cuts outlook as subscriber growth slows’
Hmmm… Not good Monday morning news for RIM today. Reuters is reporting that Barclays Capital has cut its price target on RIM from $90 to $60, and global handset sales in 2009 from 3% growth to 5% decline. Barclays also cut its smartphone growth estimate to 25% from 40%.
Barclays analyst Jeff Kvaal cut his estimates on RIM, citing the slowing demand for smartphones, offset partially by the company’s third-quarter phone launches.
“RIM’s four new device launches should partially balance the weak market,” Kvaal wrote in a note to clients.
RIM is trading right now just below the $42 mark, after opening this morning at $39.50.
|via Reuters|
Speaking at an investor conference earlier today, RIM co-CEO Jim Balsillie said the current market environment is rife with challenges that require careful planning.
“This is a more intense time than I’ve ever known — more variables, more need to navigate, more hands on the wheel, eyes on the road right now,” he said. “If you don’t, you do it at your peril.”
Based on the news we posted a few days ago, investors can’t agree on whether RIM is in a prime position for growth or ‘chasing Apple’. However, most agree that the current economic downturn will have a negative effect on sales.
UBS Investment Research analyst Jeffrey Fan cut his RIM revenue and earnings estimates today to reflect lower sales during the slowdown.
Continue reading ‘Jim Balsillie: market environment ‘Intense’, Bold selling ‘Really Well’’
It’s not uncommon to find two opposing financial analysts on RIM’s stock in even the best of times, so it should come as no surprise that during the current global economic crisis we can’t get two analysts to agree on anything.
First we have Apple shareholder Howard Lindzon of Knight’s Bridge Capital, who is not so much down on RIM as he is long on Apple. However, he does state that RIM is “chasing Apple”, and should not cannibalize their sales with the BlackBerry Bold and Storm, but rather focus on improving the BlackBerry Curve. Hmmm. (via Yahoo!)
Continue reading ‘Two very different takes on RIM’s stock’
Sprint has posted its Q3 2008 financial results, and the numbers show a sad consistency with previous quarters: fewer customers and less revenue. Sprint’s overall revenue fell 12% to $8.81 billion from $10.04 billion a year ago, while total wireless customers dropped by 1.3 million in Q3, bringing the tally to 3.5 million customers lost since Q3 2007.
You can see the full financial release after the jump or download a PDF version at the link below with tables and charts.
Sprint Q3 financial release PDF version
Sprint Nextel Q3 2008 financial release
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