Research In Motion announced ahead of the trading day on Friday that it will miss its third fiscal quarter guidance when it reports its earnings later this month. The Waterloo, Ontario-based vendor confirmed that it will not meet the $5.3 billion to $5.6 billion in revenue it guided when reporting its second-quarter earnings, and it said EPS fell in the low to mid range of its forecast. RIM also said it will miss its full-year EPS estimate of between $5.25 to $6.00 a share. The company plans to book a one-time pre-tax charge of $485 million in the third quarter in order to write down the value of unsold BlackBerry PlayBook tablets, which has not been well-received by consumers or enterprise customers. RIM did say it shipped 14.1 million smartphones in the quarter, in line with its forecast, but it only sold 150,000 PlayBook tablets into retail sales channels compared to 500,000 units in the first quarter and 200,000 in the second. Shares of RIM stock dropped 5% in pre-market trading after being halted on the news. RIM’s full release follows below. More →
HTC cut its fourth-quarter guidance for the second time earlier this week, sending shares of the company’s stock to their lowest point in more than a year. The Taiwan-based smartphone vendor cut revenue estimates by roughly 23% for the fourth quarter as steep competition from Samsung, Apple and other companies will seemingly make HTC’s run at the top short-lived. But pent up demand for a new iPhone and Samsung’s ongoing charge are only half of the equation according to two Citigroup analysts. HTC’s weak fourth quarter is “driven more by inferior product than by macro reasons,” analysts Kevin Chang and Jonathan Gu wrote in a research note earlier this week according to Bloomberg. “We are most surprised by the lack of visibility and by how fast things deteriorate in the smartphone business.” Chang and Gu cut their price target on HTC stock to NT$463, dropping their earlier Buy rating to Neutral. More →
TomTom on Monday lowered its 2011 financial outlook again as consumer interest in dedicated navigation devices dwindles. Despite beating second-quarter revenue estimates, the Dutch company cut its full-year revenue guidance to €1.23 – €1.28 billion from its previously forecasted range of between €1.43 billion and €1.48 billion. This marks the second time this year that TomTom has lowered its 2011 guidance — the company had already reduced its full-year revenue forecast this past April. TomTom made a name for itself selling sleek Personal Navigation Devices that could be mounted in any car to provide the user with voice-guided GPS navigation. Following the emergence of smartphone-based solutions over the past few years, however, dedicated navigation companies like TomTom and Garmin have not been able to recover business lost to free solutions like Google Maps and inexpensive paid mobile solutions such as those offered by CoPilot and TalaNav. TomTom does offer a series of mobile applications, but the relative high price points and the flood of competition have proven to be difficult barriers. More →
Waterloo, Ontario-based Research In Motion has begun laying off workers according to a report from a local newspaper on Tuesday. The Waterloo Region Record reports RIM has already begun reducing its staff, though there is no word on how many employees have been let go at this point. Last week, RIM reported a weak first quarter and poor fiscal 2012 guidance that sent investors running for the door. RIM’s Co-CEOs also confirmed on an earnings call that the company would be reducing its workforce, though no time frame was provided, and that the launches of several upcoming BlackBerry devices have been delayed. Shares of RIM stock have fallen more than 25% since the company reported its earnings last week, and it is down more than 50% so far this year. More →
In a note to investors Friday morning, RBC Capital Markets Managing Director Mike Abramsky lowered his target on shares of RIM stock from $45 to $35 with a Sector Perform rating. Following yesterday’s bloodbath, shares of RIM stock plummeted by as much as 19% after-hours on concerns surrounding RIM’s second-quarter and full-year outlook. The Waterloo, Ontario-based company slashed its full-year EPS outlook from $7.50 to between $5 and $6.50, and it said second-quarter earnings could be as low as $0.75 per share. Abramsky remains cautiously optimistic, however. “Disappointing Q1 results validates prior execution concerns amidst competitive pressures,” he writes. “Although it’s possible RIM fails to turn itself around, that outcome may be premature, we believe, given sustained positives.” The analyst notes 16% year-over-year growth, 68 million total subscribers, service growth and enterprise leadership among the yesterday’s bright spots, and says RIM’s strategy with QNX, TAT-built user interfaces and Android app support “remains sound.” He adds that the impact of BlackBerry 7 devices this fall and then QNX-based handsets, which are expected in the first quarter of 2012, could make RIM an “attractive acquisition candidate.”
Shares of Nokia stock plummeted by as much as 12% on Tuesday as the Finnish cell phone maker lowered its second-quarter and full-year guidance for the 2011 calendar year. Nokia said competitive dynamics and market trends across multiple price categories will cause net sales of its devices and services to fall “substantially below” its previous projections of between €6.1 billion and €6.6 billion in the second quarter. The company also set operating margin will be well blow previous guidance, which sat between 6% and 9%. Nokia also stated that its full-year guidance is no longer valid. “Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition,” said CEO Stephen Elop in a statement. “Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011.” Nokia’s full press release can be seen below. More →
While Acer scrambles to reverse the current negative trend that saw its PC shipments fall last quarter as revenue dove 56%, Taiwan-based competitor Asustek just issued second-quarter guidance that predicts growth in shipments over the first quarter of 2011. While analysts go back and forth over what the emerging tablet market’s impact on netbooks and notebooks might be moving forward, Asustek expects to ship 3.1 million devices this quarter, a 10.7% increase over the first quarter. While the company does plan to focus on tablets in addition to its core laptop business, it only expects about 9.7% of its total shipments — or 300,000 units — to be Eee Pad tablets. Asustek also expects revenue for the second quarter of 2011 to grow 5% to NT$77.6 billion. More →
In a note to investors, RBC Capital Markets Managing Director Mike Abramsky echoed a notice from Research In Motion that cut the company’s quarterly outlook citing lower than expected smartphone sales. RIM now expects Q1 revenue “slightly below” original guidance due to pullback in shipments of smartphones and a lower average selling price. Shares of Research In Motion are down over 10% in after hours trading. We exclusively reported that RIM might only announce one handset at the company’s BlackBerry World conference next week, as opposed to most of their upcoming product lineup.
RBC Capital Markets Managing Director Mike Abramsky on Tuesday reiterated the firm’s position that sales of popular Apple products like the iPad 2 likely helped Apple record an impressive fiscal second quarter. In a note to investors, Abramsky wrote that tremendous demand for Apple’s iPad 2 tablet along with solid sales of the iPhone 4 (17 million units) and Apple’s refreshed MacBook Air and MacBook Pro notebooks (3.6 million total Macs) may have led to $24 billion in revenue in the second quarter. The figure would represent 78% growth over the same quarter last year, and is above Wall Street’s consensus of $23 billion. RBC sees Apple having shipped 7 million iPads in the second quarter, which includes 2-3 million iPad 2 units and is down 5% from the year prior. The firm estimates 8 million third-quarter iPad shipments, and also notes that Apple will likely launch the iPhone 5 in September — but if it instead launches in June, it could add $1.2 billion to the firm’s $23-$24 billion third-quarter revenue estimates. RBC adjusted its full-year iPad sales forecast up from 25 million to 31 million units, thus pushing its fiscal 2011 revenue estimates from $99 billion to $102 billion and possibly helping Apple to cross the $100 billion milestone for the first time. Apple will report its fiscal second-quarter earnings on April 20th.
In a note to investors on Friday, RBC Capital Markets Managing Director Mike Abramsky attempts to put Research In Motion’s fourth-quarter earnings and first-quarter guidance in perspective. RIM reported its fourth-quarter and full-year earnings after the bell on Thursday and shares of RIM stock subsequently plummeted by as much as 12% in after hours trading. Most of the concern seemed to surround RIM’s guidance for the first-quarter of its 2012 fiscal year. Abramsky points out that while investors may be concerned by RIM’s guidance, it likely reflects product transitions rather than intensifying competition. He notes that new product launches and future support for Android applications will help restore confidence in RIM moving forward. While RBC does identify several possible barrier such as a general decline in technology valuations, unknown market acceptance of new products and declining average selling prices of BlackBerry smartphones, the firm reiterates its $90 price target for RIM stock.
Hewlett-Packard on Tuesday reported its earnings for the first quarter of the company’s 2011 fiscal year, which ended on January 31st. Revenue missed Wall Street’s expectations slightly, coming in at $32.3 billion versus the Street’s projected revenue of between $32.75 and $33.59 billion. Earnings per share was up an impressive 26% year-over-year to $1.17, but it still missed the Street’s expectation of between $1.26 and $1.32 per share. Cash flow from operations was up 28% year-over-year, however, and profit was up 16% to $2.6 billion. “I’m pleased with our EPS and margin expansion during the quarter. Going forward, we have the opportunity to further capitalize on our customers’ demands for higher value-added solutions,” said HP’s CEO Léo Apotheker in a statement. “HP has a powerful portfolio, including exciting, recently announced cloud and connectivity offerings. We are focused on leveraging these strengths to extend our leadership and accelerate growth.” HP lowered its full-year revenue forecast from between $131.5 and $133.5 billion to between $130 and $131.5 billion. Hit the break for HP’s full press release. More →
Nokia revealed its third consecutive decline in profits as the struggling cell phone maker reported its fourth-quarter 2010 earnings. Net sales grew 6% year-over-year to €12.65 billion, but operating profit slid 26% from €1.47 billion in the fourth quarter of 2009 to €1.09 billion. Operating profit margin in the company’s Devices and Services division was also down substantially from 15.4% in Q4 2009 to 11.3% in Q4 2010, and Nokia said it expects a further decline in the first quarter of 2011, dropping to between 7% and 10%. Smartphone shipments actually grew to 28.3 million in the fourth quarter, up from 20.8 million in the same quarter in 2009 and 26.5 million sequentially, but the market outgrew Nokia at a truly alarming pace. Despite this growth, Nokia’s share of the global smartphone market slid to 31% from 38% in the previous quarter. “The game has changed from battle of devices to war of ecosystems,” Nokia CEO Stephen Elop said on the company’s earnings call. “Our industry has changed and we have to change faster.” Hit the break for Nokia’s full report. More →
It hurts to be Palm, Inc. right now. After having its stocks rating downgraded earlier this month, the struggling mobile handset maker has cut its guidance numbers due to slower than expected sales and adoption of its mobile products. The news was delivered by Palm in a short an succinct manner:
Palm, Inc. (NASDAQ:PALM) today indicated that it expects that revenues for the third quarter of fiscal year 2010 will be in the range of $285 million to $310 million on a GAAP basis and in the range of $300 million to $320 million on a non-GAAP basis.1 Revenues for the quarter and full year are being impacted by slower than expected consumer adoption of the company’s products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods. Accordingly, Palm expects fiscal year 2010 revenues to be well below its previously forecasted range of $1.6 billion to $1.8 billion. The company will provide more detail on its financial results during Palm’s third-quarter financial results conference call currently scheduled for Thursday, March 18.
Palm predicts Q3 revenue to be somewhere in the area of $300 million; Wall Street analysts were predicting $425 million. The company only said that 2010 revenues would be “well below” the forecasted $1.6 billion. Currently Palm stock is down 17%. Palm coincidentally halted production on their entire line of products, right? More →