RBC

Business
September 8, 2011
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RBC: RIM’s turnaround remains cloudy

By on September 8, 2011 at 1:20 PM.

RBC: RIM’s turnaround remains cloudy

While sales of Research In Motion’s brand new BlackBerry 7 devices won’t be reflected in RIM’s second-quarter earnings report next week, analysts still aren’t sold that the device launches have positioned RIM to rebound. In a note to investors on Thursday morning, RBC Capital Markets analyst Mike Abramsky wrote that he expects RIM’s earnings in the fiscal second quarter to narrowly beat the consensus, with revenue down 2% from the same quarter last year to $4.5 billion and earnings per share at $0.90. The Street sees revenue at $4.5 billion as well, but EPS estimates are slightly lower at $0.87. Abramsky also expects BlackBerry handset shipments to slide 9% from the first quarter to 12 million units, and PlayBook shipments are expected to grow from 500,000 in the first quarter to 650,000 in the second. Read on for more. More →

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Business
August 26, 2011
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HP's PC blunder will deteriorate HP brand value, analyst says

By on August 26, 2011 at 7:01 AM.

HP's PC blunder will deteriorate HP brand value, analyst says

It remains to be seen whether Hewlett-Packard’s upcoming overhaul will pay off in the long run, but one things seems clear: the manner in which HP revealed its plans was ill-conceived at best. HP’s announcements sent its stock tumbling, and analysts continue to lose faith in the company as unrest builds. In a note to investors on Thursday, RBC Capital Markets analyst Amit Daryanani cut his rating on HP stock to Sector Perform from Outperform, and he lowered his price target $5 to $30. Daryanani says HP’s announcement that it may spin off or sell its PC business “will accelerate the deterioration of HP’s brand and asset value,” and he thinks competitors will gain market share as a result. The analyst also believes HP’s decision to kill off its webOS device business could devalue the company’s PC division if it opts for a sale. He thinks a quick sale would be a good move for HP, though he writes that a cut in company forecast or increased buybacks are also options. More →

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Business
August 25, 2011
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Even without its core, Apple will live on

By on August 25, 2011 at 10:15 AM.

Even without its core, Apple will live on

If a leader’s resignation from his or her CEO role at a company doesn’t have an impact on that company’s business, the leader was ineffective. As such, it seems odd to think analysts and pundits are spending time debating whether or not Apple founder Steve Jobs’s departure from his chief executive post will change Apple. The obvious answer, of course, is that Apple will remain largely unchanged in the near term — product roadmaps always extend for multiple years and Jobs will now sit at the head of Apple’s board — but over time the company will grow and evolve under now-CEO Tim Cook’s lead. After all, a company that does not grow and evolve is doomed to fail. And if there is one thing Apple is good at, it’s evolving. Read on for more. More →

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mobile
August 24, 2011
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BlackBerry 7 launch: Weak AT&T sales, healthy Sprint sales according to RBC

By on August 24, 2011 at 10:50 AM.

BlackBerry 7 launch: Weak AT&T sales, healthy Sprint sales according to RBC

Sales of Research In Motion’s new BlackBerry 7 smartphones have been mixed out of the gate according to one analyst, with AT&T showing weak sell-through while Sprint stores have shown healthy sales to end users. In a note to investors on Wednesday, RBC Capital Markets Managing Director Mike Abramsky wrote that the majority of subscribers who purchased BlackBerry 7 smartphones during their first two days of availability were upgrading from older BlackBerry models rather than switching from other platforms. Checks performed by RBC at 40 retail stores found that the sales of the AT&T’s BlackBerry Torch 9810 were light while the Bold 9930 sold well at Sprint, with the phone having been sold out at 20% of the stores contacted. Initial inventory at each of the 40 stores is unknown. Abramsky also commented on U.S. carrier support, noting that AT&T and Sprint appear more supportive with aggressive pricing of RIM’s new devices, while Verizon and T-Mobile’s less competitive pricing might have a negative impact on sales. Read on for more. More →

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mobile
July 18, 2011
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RIM to discontinue Wi-Fi BlackBerry PlayBook?

By on July 18, 2011 at 2:15 PM.

RIM to discontinue Wi-Fi BlackBerry PlayBook?

In a note to investors Monday afternoon, RBC Capital Markets Managing Director Mike Abramsky reiterated an OTR Global report that Research In Motion is possibly planning to stop production of the current Wi-Fi BlackBerry PlayBook model. The Wi-Fi version of the BlackBerry tablet is the only version Research In Motion sells for the time being. The reasons for the discontinuation of the Wi-Fi edition, Abramsky states, could be related to a pullback in production, a move that would align channel inventory with slower than expected sell-through, in addition to RIM focusing on upcoming PlayBook versions with cellular connectivity.

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Business
July 12, 2011
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Analyst calls for RIM to break apart handset, network businesses

By on July 12, 2011 at 9:00 AM.

Analyst calls for RIM to break apart handset, network businesses

With Research In Motion’s annual shareholder meeting scheduled to take place later today, one popular RIM-focused analyst is calling for the company to split its handset and network businesses into two separate companies. “RIM’s organization, like its handsets, needs modernization. By acting now, splitting RIM into network and handset businesses may target opportunities and unlock significant shareholder value,” RBC Capital Markets Managing Director Mike Abramsky wrote in a note to investors on Tuesday. “RIM’s end-to-end solution was conceived when data devices and networks were nascent — but times have changed,” the analyst continued. Abramsky believes the standalone network business can target a market of roughly 400 million Android devices, Windows Phones, tablets and other devices with “affordable, efficient, cross-platform mobile push messaging, social networking, cloud and business data services (and software)” that is already interconnected with 595 carriers around the globe. On the other end, splitting off RIM’s devices business could accelerate handset innovation, strengthen developer relationships and help the company prioritize its customers and developers over its carrier partners — a sentiment thought by some to be paramount to RIM’s success moving forward. Abramsky reiterated his price target of $35 for RIM stock, noting above-average risk.

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Business
June 17, 2011
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RIM is bloody but not dead yet, RBC says

By on June 17, 2011 at 9:45 AM.

RIM is bloody but not dead yet, RBC says

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.”

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Business
April 28, 2011
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Research In Motion expects lower smartphone shipments in Q1

By on April 28, 2011 at 6:04 PM.

Research In Motion expects lower smartphone shipments in Q1

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.

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Tablets
April 27, 2011
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RIM may have doubled BlackBerry PlayBook build plans, 4G version could launch in June

By on April 27, 2011 at 1:01 PM.

RIM may have doubled BlackBerry PlayBook build plans, 4G version could launch in June

In a note to investors on Wednesday, RBC Capital Markets General Manager Mike Abramsky suggested that sales of RIM’s new BlackBerry PlayBook tablet may be exceeding the company’s initial expectations. According to Abramsky, RIM may have increased the number of tablets on order from its manufacturing partners by as much as 100% to between 1.2 and 1.5 million units for the second quarter of 2011. The note cites strong sales estimates as one possible cause, and also states that the launch of 4G-enabled versions of the PlayBook may have been pushed up to June — another possible cause for the ramp up. Despite the possible increase in orders, RBC maintains its earlier sales projections of 500,000 PlayBook tablets in RIM’s May quarter and 4 million units total in 2011.

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Tablets
April 20, 2011
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First day BlackBerry PlayBook sales may have exceeded expectations

By on April 20, 2011 at 10:42 AM.

First day BlackBerry PlayBook sales may have exceeded expectations

Amid multiple reports to the contrary, RBC Capital Markets General Manager Mike Abramsky on Wednesday said first day PlayBook sales likely exceeded analysts’ expectations. In a note to investors, Abramsky states that RIM may have moved about 50,000 PlayBook tablets on launch day alone, including pre-order sales. The analyst and his team placed calls to 70 different Best Buy, Staples and RadioShack locations to inquire about PlayBook sales performance on launch day. Reported performance ranged from light sales in some locations to sell-outs, which occurred at 11% of the stores RBC polled. RBC also used Best Buy’s online inventory tool to check stock at 180 additional locations in 10 major U.S. cities, and found that the 16GB PlayBook is unavailable at 13% of stores, the 32GB model is unavailable at 87% of stores and the 64GB model is unavailable at 91% of the locations viewed. As preliminary inventory quantities for these stores is currently unknown, this information is of little use since many stores might not have received higher-capacity PlayBook models to begin with. Finally, Abramsky notes that the PlayBook may have outperformed first-day sales of Motorola’s XOOM and even Samsung’s popular Galaxy Tab, and he believes RIM is on track to sell 500,000 PlayBook tablets in its first quarter of availability.

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Tablets
April 12, 2011
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RBC: 'iPads outselling hotcakes,' iPhone 5 due in September

By on April 12, 2011 at 10:58 AM.

RBC: 'iPads outselling hotcakes,' iPhone 5 due in September

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.

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Business
April 1, 2011
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RBC cuts Motorola forecast citing competition, poor XOOM sales

By on April 1, 2011 at 2:50 PM.

RBC cuts Motorola forecast citing competition, poor XOOM sales

RBC Capital Markets analyst Mark Sue on Friday cut his price target for Motorola Mobility stock to $33 from his previous target of $38. Sue also lowered his first and second-quarter sales and revenue forecasts, citing increased competition and slow sales of Motorola’s XOOM tablet. Motorola anticipated a rough first quarter when it reported fourth-quarter and full-year 2010 earnings in January, but Sue now believes earlier estimates were still high. He notes increased competition from devices like the HTC ThunderBolt at key carrier partner Verizon Wireless in revising his first-quarter device sales estimate down to 9.2 million units from 9.9 million. Sue also shaved $100 million from his first-quarter revenue forecast, which now sits at $3 billion. In the second quarter, Sue now sees Motorola selling 10.5 million devices, which includes only 300,000 Motorola XOOM tablets — down from his earlier estimate of 400,000 XOOMs and 10.9 million total devices. Motorola anticipates a net loss of between $26 and $62 million in the first quarter of 2011.

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mobile
March 21, 2011
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AT&T’s T-Mobile acquisition to benefit Apple, RIM and Google

By on March 21, 2011 at 6:20 PM.

AT&T’s T-Mobile acquisition to benefit Apple, RIM and Google

In a note to investors on Monday, RBC Capital Markets Managing Director Mike Abramsky highlighted several implications surrounding AT&T’s acquisition of T-Mobile USA. Interestingly, RBC sees the merger as having the potential to provide various benefits to each of three staunch rivals — Apple, RIM and Google. For Apple, this deal will drastically increase the company’s addressable market for the iPhone, and could result in an additional 6 to 8 million iPhone subscribers over the next 2 to 3 years. Abramsky also notes that additional pressure could be put on Sprint to offer its own version of the iPhone, which would make the device available from all major U.S. carriers. For RIM, Abramsky writes that while T-Mobile only accounted for between 5 and 7% of RIM’s revenue in 2010, the company could potentially put more BlackBerry devices in the hands of users when devices that would normally be AT&T exclusives become available to T-Mobile’s 46 million subscribers. Finally, RBC’s note points out that while Google may be losing a strong Android partner in T-Mobile, AT&T has shown that it is now committed to Android as a platform, which could lead to better device selection moving forward for former T-Mobile subscribers. AT&T’s acquisition of T-Mobile is expected to close within the next 12 months, pending regulatory approval.

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