Sterne Agee: RIM’s Q2 may beat the Street, long-term still a concern

By on Sep 12, 2011 at 7:10 PM
Business September 12, 2011

As RIM prepares to report its earnings on Thursday for the second fiscal second quarter of 2012, all eyes are turning north following the Waterloo, Ontario-based vendor’s first-quarter report, which was something of a bloodbath. RIM’s first quarter performance wasn’t abysmal — the company did see gains in several international markets — but it missed the Street’s consensus by a wide margin, trimmed its second-quarter guidance and stated that would soon be laying off workers in an effort to streamline operations. RIM has since launched its first wave of BlackBerry 7 smartphones and while sales of its new devices won’t really be reflected in its second-quarter earnings, some analysts still believe RIM could beat Wall Street’s expectations when it reports later this week. Read on for more.

RBC Capital Markets analyst Mike Abramsky projected a second-quarter win for RIM in his note last week, and now Sterne Agee analyst Shaw Wu weighs in, noting that RIM could beat the Street when it reports after the market closes on Thursday. “We anticipate the company to meet or exceed consensus estimates of $4.5 billion in revenue and $0.67 in EPS (we have in-line revenue and 3 cents better EPS),” the analyst wrote. He believes RIM shipped 11.6 million handsets and 400,000 PlayBooks in the second quarter.

Looking forward to the third quarter, Wu’s checks indicate that RIM’s BlackBerry 7 phones are seeing good interest in terms of upgrade sales, so guidance is “likely better than feared.” The analyst also reasserted his earlier comments that carriers looking for a viable third option to shift some focus from Apple’s iOS and Google’s Android may turn to BlackBerry.

The long-term impact of BlackBerry 7 and QNX devices is still a big question mark however, and Wu isn’t yet sold that there is a pot of gold at the end of this rainbow. As a result, the analyst trimmed his projections moving forward. Wu now estimates that RIM’s full-year fiscal 2012 earnings will miss the Street’s consensus of $20.4 billion in revenue and EPS of $5.11 — he sees $20.3 billion and $5.05 — and fiscal 2013 earnings are now estimated to narrowly top the Street’s consensus of $22 billion in revenue (Wu sees $22.3 billion) and earnings of $5.22 per share (Wu sees $5.25).

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  • Anonymous

    Wait, another article here said that OS 7 phones were not selling even to the Blackberry faithful, now they are “RIM’s BlackBerry 7 phones are seeing good interest in terms of upgrade sales…” Um, which is it?

  • http://twitter.com/UrbanEnigma Yves

    RIM can’t do anything right in the eyes of blog journalists and “analysts”

    • Feeb

      Yay! You’re not smart!

    • http://www.youtube.com/jeromeo1980 Jeromeo

      My mom walked into CompUSA, picked up a PlayBook and said, “So this is for people who can’t afford an iPad…”.  That said it all.  I don’t care what e-mail you CAN’T open on a 5.5 inch screen.  Even an old lady can see what a young programmer can see———BlackBerry is out of touch.

  • Cer

    “BGR: We won’t stop until RIM is dead and gone.”

    • Anonymous

      Not sure about that.  I found BGR looking for Blackberry stories years ago.  They (Jonathan specially) love RIM.

      • Anonymous

        …before they decided to switch their diet to Apple.

      • Cer

        I guess you haven’t been paying attention recently.

  • Anonymous

    Rim FTW

    Love my 9900 and with the BIS improvements coming our way next month…its all good.

  • Romanh99

    RIMpire will strike back! Keep sleeping on the Dark knight….. 

  • guest

    I’m one of those rare (unfortunately) ones who went from the iPhone to the Blackberry. Enjoying the experience so far. My sister has had nothing but trouble with her Droid and Fascinate (Android). I really don’t know what Blackberry is doing wrong, it’s a good phone that does what I need. Just like my iMac.

    • Anonymous

      Truthfully, Blackberries are the best phones out there.  Best battery.  Highest security.  Most stable OS. I think their hardware design grew stale.  It was the same thing over and over and over.  Just like the iPhone.  I’d love to go back, one day.  But I find it difficult to leave all my Android devices.  

      By the way, I saw the new Bold at a Verizon store and it does look very nice.

    • Anonymous

      Your not as rare as you think. I’ve had several android phones and the iPhone. None of them can take abuse like my blackberry can. I got tired of having Fragile phones that crack when you drop them and phones with terrible battery life. Come to think of it I’m thinking of attaching a piece of lead and altering my BB as a police slapper to club some of these keyboard critics. Yeah thats sounds like a great idea. i can treat these so called keyboard crictics like a King ! more like Rodney King when im done clubbing them like baby seals lol….

    • CarBob

      IMO, BlackBerry has always been a very good phone.  I have never had a problem with the BlackBerrys I’ve owned – starting with the BB 7130e, 8330 Curve and 9800 Torch.  I’ll be getting a BB 9900 Bold soon, and will get the BlackBerry PlayBook around Christmas time.

      These smartphones have always proven to be reliable and dependable, especially the PUSH e-mail, which is very important to me.

      GO RIM !

      - CarBob

       

    • Anonymous

      The problem is their hardware and app development has lagged painfully behind compared to other platforms. If only those 2 Rimjob CEO’s Twiddle Dumb and Twiddle Dumber would get canned and the board put someone with vision in their place Rimjob could maybe become Rimpire once again.

      • TimeToChange

         Agreed. Their corporate business and installed base device refresh can keep them going even if they are gradually losing in churn. BUT long term they desperately need fresh senior leadership, better still to be acquired so that the huge empire of management dross that was built up in the fat years can be dumped. There are more Directors there that at a Hollywood film convention.

        I’m not sure who would want them now though. Maybe Cisco? Can’t think of anyone else with the clout and possible reason to do it. 

      • Anonymous

        What do you mean by “app developement”? Except for a good navigation app, I don’t feel I’m missing anything. H we even have angry farm now as a counterweight to angry birds…

        IMO the whole lacking apps argument is vastly overrated

      • Then what is

        understand your view …… but then how do YOU explain the spectacular fall in market share? Somethings responsible…….

    • Rudy

      Agreed – it’s a matter of getting the developer community on board and RIM will be back without a doubt

      QNX I really think is going to help a LOT, especially when Android App Player comes into play.  The unfortunate thing is QNX is making RIM take a leap forward, but them 2 steps back with potential for lost functionality

      • Anonymous

        I couldn’t agree more…

        I am an avid BlackBerry user and have been for many years. I enjoy their OS and the virtually unlimited customization options for the phone (everything to themes all the way down to how long or how many times the phone vibrates). I fear the best parts of BlackBerry will no longer be there when they switch to QNX.

        I’m biting my nails in anticipation!

  • Bobdonhim

    The problem with RIM is Mike L is a genius but very hard-headed.  He is working on stuff that won’t be standard for many years to come…just look at his contributions to the Perimeter Institute.  The fact he is hard-headed meant that he wanted the devices to be everything he thought they should be, not what the customer was asking for.  He also isn’t great on the sales/marketing side.

    Jim B is a whole different ball game.  I have heard Jim speak on numerous occasions internally at RIM and everytime he left the room, we all asked each other “WTF did he just say?”.  Either he is waaaay too smart and cant convey the message or he has no clue what’s going on.  The concensus at RIM is the latter.

    So, to summarize Mike L is brilliant but doesn’t listen to others and Jim B has no clue.  I think RIM should keep Mike L for his ideas but hand the sales/marketing reigns to someone else.

    • agree

      Not a bad idea. In fact with all his cash, I often wonder why Mike L doesn’t just say b***er this… I’m stepping down as CEO but staying on as Chief Scientific Officer or some such office. The guy is a rocket scientist (literally?) and seems happiest at that. Contrast that to his demeanor when talking to Wall St, Analysts and media…….. BBC anyone??

      Ditto – Jim B has his hockey.

  • Jamma3

    The greed of America…they will beat street on rumors and speculations.  When they don’t because of your stupidity then they should sell the company.  When will people wake up and see that greed is killing America.

  • Anonymous

    “As RIM prepares to report its earnings on Thursday for the second fiscal second quarter of 2012…”

    I love reporting on future results!

    Wizards, unite!

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