Actually, Amateur Hour Seems Far From Over, RIM
“Amateur hour is over.”
That’s the slogan Research in Motion is using to promote its new BlackBerry PlayBook tablet. But with skepticism for the company’s prospects on the rise, that proclamation is becoming increasingly more ironic. To wit, the growing mound of analyst downgrades piling around the company like manure on a horse farm. Seems nobody is much buying RIM’s exuberant guidance for full-year profits of $7.50 per share, particularly after its recent profit warning and a disappointing BlackBerry World developers conference.
On Wednesday, Societe Generale analyst Andy Perkins downgraded RIM to Hold from Buy, lowered his price target on its shares to $50 from $70 and trimmed his EPS estimates on the company for the next two years.
“We have seen time and again in the mobile manufacturing business that a ‘one-off’ poor quarter can lead to a whole series of others,” Perkins explained in a note to clients. “So while we note management’s full year guidance, we are very cautious about building this into our base case. We had hoped that the extremely successful international operations would give RIM time to introduce its new models into the U.S. market. However, these models have been delayed and will not have the new QNX operating system when they are finally launched. As such, we believe RIM is likely to struggle for much of the remainder of the year.”
Bleak, though perhaps not quite as bad as it sounds.
Perkins says RIM’s profit warning isn’t a disaster. At its mid-range guidance, the company’s sales would be up 28 percent year over year and its EPS flat.
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