Shares of Research In Motion (Nasdaq: RIMM) have fallen nearly
17 percent over the last five trading sessions as traders are
positioning themselves ahead of the company's first-quarter 2013
earnings report, expected out on Thursday after the market closes.
Shares hit a session low of $8.86 Wednesday morning, just pennies
off the 52-week low of $8.83.
Analysts are expecting RIM to post a quarterly loss of 1 cent per
share on sales of $3.11 billion. Research In Motion issued a gain
of 22 cents per share last quarter and $1.33 per share for the same
quarter last year.
Over the last six quarters, Research In Motion has topped Wall
Street estimates by about 5 percent, on average. Check out our
page to get a quick-and-easy rundown of RIM's recent results.
Sell-side firms are decidedly bearish on the embattled company's
stock. According to our
page for RIM, just five firms rate the stock at Buy, 32 recommend a
Hold, and 14 say sell the stock. Despite the negative sentiment, an
average of analysts' price targets sit at almost $14.
- Goldman Sachs - Believes sales will "keep missing
expectations, but deep opex cuts may drive EPS up." The firm has
seen RIM pricing aggressively to maintain its subscriber growth,
and thus is modeling for lower average selling prices to push
units higher. Goldman believes RIM will continue to make
significant market share losses: from 10 percent of the
smartphone market this year to just 3 percent in 2015.
Maintains Neutral rating and $13 price target.
- Wedbush - The firm's comments related to the quarter were
predictably negative. Some of the more interest comments were
related to specific business elements:
- BlackBerry 10 devices will not help over the long term as
iOS and Android will continue to steal share. Windows will also
be emerging as a viable third in the space.
- A split of the company into two units "would be a step in
the right direction..." but the firm sees "minimal value" in
the handset division.
- A split could create a "decoupling of RIM's devices from
the messaging platform..." and thus accelerate near-term losses
of those all-important enterprise users.
Maintains Neutral and $9.50 price target.
TD Newcrest - Said "although the warning on May 29th implied
that the trough for RIM in front of the BlackBerry 10 product
cycle is deeper than expected, we doubt weak financials in Q1 or
Q2 will move the stock at this point." TD instead proposes these
items to watch: 1. timing of BlackBery 10; 2. substantive updates
from the strategic review; 3. any accelerating decline in the
Services ARPU; and 4. any updates on the $1 billion cost
reduction target, including specific headcount reductions.
Maintains Hold and $12.50 target.
BGC Partners - Noted both internal and external challenges.
Internal includes the "process of reducing headcount and changing
senior management, with the ensuing chaos that results. This
increases the chance of poor execution ahead of its critical
product launch later this year." Externally, the firm pointed at
the "highly competitive pricing dynamic, a situation that we see
only getting worse as competitors use price as a lever to chase
after market share."
BGC said while it is tempting to want to call a bottom in the
stock amid reports of liquidation, the firm said to consider the
- Valuing patents can be tricky, because ultimately they are
worth only the price a buyer is willing to pay.
- Any potential strategic bidder for RIMM has probably
already taken a look at the company; a strategic acquisition
this year seems unlikely.
- Transitions to new platforms are difficult and the cycle of
downward revisions to revenue, phone volumes, and selling price
may be poised to continue, not abate.
Maintains Sell and $10 target.
Research In Motion normally reports quarterly results between
4:15pm and 4:30pm ET. Tune into our
category ahead of then to get all the breaking news within seconds
of the official release.