John Paczkowski

Recent Posts by John Paczkowski

Research In Motion Earnings: The RIM Reaper Cometh

Research In Motion will post its fiscal fourth-quarter results this Thursday, and Wall Street analysts are already gritting their teeth in anticipation.

To wit, this recent note from Barclays Capital analyst Jeff Kvaal, which sums up RIM’s situation heading into earnings under the headline “Grim And Getting Grimmer.”

Youch.

Pretty much says it all, though the color Kvaal offers here is worth noting, as his forecast — $4.5 billion in revenue and 75 cents per share in profit — is below not only RIM’s guidance of revenue — between $4.6 billion and $4.9 billion, and 80 cents to 95 cents per share in profit — but the Street’s $4.55 billion/82 cents a share, as well.

Why the dour outlook? A complaint we’ve heard before: RIM’s BlackBerry 7-based products are “aging rapidly.”

“Our checks indicate that current demand is poor: BlackBerry 7 devices are now close to six months old, and our checks suggest that the initial enthusiasm post launch has tailed off,” says Kvaal. “We model 11 million unit volumes in FYQ4, at the low end of the guidance range. Management’s aggressive marketing campaign, targeted for the U.S., appears not to have been as effective as hoped. BlackBerry 7 devices remain expensive comparatively and the once popular 8520 is going end of life.”

Worse, with no new products in sight until the BlackBerry 10 launch later this fall and the significant product transition it heralds, RIM’s outlook, for the time being, is likely to remain weak.

Says Kvaal, “We believe further downside is possible. … We believe the dire outlook could deteriorate well below consensus expectations.”

Might be wise to break out that Mylanta a few days early, RIM investors …


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