That big thud you hear? RIM's earnings
Posted
Jun 25 2008, 04:53 PM
by
Kim Peterson
Rating:
Hoo-boy! We have some troubling news in Research in Motion's first quarter results out today. The BlackBerry maker missed analysts' expectations on both revenue and profit. Here's looking at a busy after-hours -- the stock is already down nearly 8%.
RIM had a classic case of too much hype fueling market expectations. There was good news in the quarter: revenue up 107% from last year to $2.24 billion, and profits up 116% to 84 cents a share. The problem is that analysts were hoping for more; the Street wanted $2.27 billion in revenue and 85 cents a share.
RIM's profit guidance for the second quarter also fell flat. The company said it's expecting EPS in the 84-89 cent range. Analysts were already looking for 90 cents. Similar story with net subscriber adds in the quarter. RIM said to expect 2.6 million, but analysts wanted 2.8 million.
Add to this reports out today that the BlackBerry Bold release on AT&T may be delayed for a few weeks until at least August. Not the best day for RIM investors.
Here's what some people are saying about the news:
Morgan Keegan analyst Tavis McCourt: "They're ramping up spending, and it'll be mostly for marketing...A lot of analysts will need to lower their profit estimates going forward."
Global Crown Capital analyst Pablo Perez-Fernandez: "Our fears about the Bold being late are probably true and that's why the stock is down."
Fund manager Duncan Stewart: "The numbers in fact look perfectly fine in every respect except one. It appears as if they are forecasting earnings for the next quarter to be slightly lower than the consensus estimates. Every other metric is better."
Research Capital analyst Nick Agostino: "The disappointment is on the guidance side and hence the reason for the (stock) selloff."
