Mission RIMpossible: Full-Year Earnings of $7.50 Per Share
If Research in Motion thinks its business will pick up enough by the end of the year to bring full-year earnings to $7.50 per share, it’s sadly mistaken.
With its current smartphone portfolio already long in the tooth, a lack of compelling products on the near horizon and enterprise beginning to adopt bring-your-own-device policies that allow employees to choose another device over a company-issued BlackBerry, the risks to RIM’s market share are growing, not fading. And as that happens, the $7.50 EPS target for fiscal 2012 the company set in its April earnings warning is looking silly.
Or rather, sillier than it was when it was first issued. Earlier this week, RIM’s stock slipped below $37, its lowest level since 2007.
At some point, the company’s leadership is going to have to abandon the target. As Susquehanna analyst Jeffrey Fidacaro observed this week, “it is simply a matter of time.”
“Current trends suggest RIM continues to lose share in the U.S., and media sources flagged that the new Bold 9900/9300 based on OS7 could be further delayed until September vs. management’s expectation for the summer,” Fidacaro adds. “We believe this could lead to an even worse second half not simply due to a push-out, but the timing would also pit RIM against the next gen iPhone, as well as a slew of new Android devices from Samsung, HTC, and others, some with 4G radios.”
RIM reports earnings next Thursday.