BlackBerry Investors Pin Hopes On Playbook
13 Décembre 2010 - 11:58PM
Dow Jones News
Research In Motion Ltd. (RIMM) is expected to report strong
earnings growth for its fiscal third quarter Thursday, but many on
Wall Street have their eyes trained on the expected debut of the
company's first tablet device sometime early next year.
Since the company's most recent earnings report in September,
Research In Motion's share price has surged by more than 30%,
though it remains below its March peak in the $75 range. Part of
that run-up came after the company beat analysts' expectations for
the period ended Aug. 28, thanks to strong demand for the company's
BlackBerry line of smartphones.
But part of the recent gains can be traced to enthusiasm over
the Playbook, a tablet device the company announced in September.
The device is not expected to come to the market until sometime in
early 2011.
"Overall, we remain constructive on RIM as we believe share
prices have yet to fully capture the accretive effect of RIM's
entry into the tablet market," Stephen Li of Raymond James wrote in
a note to clients Friday. He maintains an outperform rating and $75
price target on the stock.
Several brokers have begun to add predictions for the Playbook
into their estimates for next year, when RIM's BlackBerry business
may come under even more pressure from devices such as Apple Inc.'s
(AAPL) iPhone and Android-based smartphones.
"If executed properly, the PlayBook could help RIM defend its
enterprise leadership against intensifying competition from Apple,
Android and [Windows Phone 7]," Ittai Kidron of Oppenheimer wrote
in a note to clients last month. He maintains a perform, or
neutral, rating on the stock.
Strong Results
More pertinent to the near term are RIM's results for the
quarter ended Nov. 27.
Wall Street is looking for strong double-digit growth in both
earnings and revenue for the period, as sales of new devices such
as the BlackBerry Torch as well as older devices in emerging
markets are expected to beef up the bottom line.
Specifically, net income is expected to jump by 40% from the
year-earlier period to about $877 million, or $1.64 per share,
according to consensus estimates from Thomson Reuters.
Revenue is projected to grow by 38% to $5.4 billion.
Analysts also expect RIM to report smartphone unit shipments of
14 million. The company had previously predicted shipments in a
range of 13.8 million to 14.4 million for the period.
This will be the final period in which RIM reports metrics for
average selling price, or ASP, and net subscriber additions. The
company said in its most recent earnings report that those figures
were less reflective of the health of its business as it broadens
its reach across countries and price points.
Analysts currently expect ASPs to come in around $310 for the
quarter, with a little more than 5.1 million net subscriber
additions for the period.
Long-Term Concerns
Most expect the BlackBerry Torch at AT&T Inc. (T) to be the
quarter's star performer, though RIM does not break out specific
results for each device.
AT&T is working to beef up its offerings of other
smartphones, as the carrier is widely expected to lose its
exclusive access to the popular iPhone, which is expected to go on
sale at Verizon Wireless sometime early next year.
That has caused many analysts to worry about RIM's future
business at Verizon. RIM's BlackBerry models also compete with
phones from Motorola Inc. (MOT), Samsung, HTC and other vendors
running on the Android platform designed by Google Inc. (GOOG).
Also, Microsoft Corp. (MSFT) released the first phones for its
Windows Phone 7 operating system in early November.
"Over time we expect RIM to cede significant share in North
America, a geography that contributes to over half of sales," wrote
Ashok Kumar of Rodman & Renshaw in a note to clients
Monday.
Mark McKechnie of Gleacher & Co. downgraded RIM to neutral
last week on worries that the recent share-price run-up captures
the company's near-term potential and fails to reflect some
longer-term concerns.
"We see increased competition in 2011 as smartphones move to the
midrange, alternative solutions penetrate the enterprise, and RIM's
bandwidth efficiency has not yet translated to the consumer,"
McKechnie wrote.
-By Dan Gallagher; 415-439-6400; AskNewswires@dowjones.com
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