Shares of struggling smartphone-maker Research in Motion
) soared on Wednesday. Shares had climbed nearly 12 percent and
to trade near $11.80 late Wednesday.
Last Thursday, Research in Motion plunged after releasing its
third-quarter earnings results. The stock initially traded
sharply higher on the back of the results, then dropped during
the conference call and continued to sell off in the following
Wednesday's jump in the share price comes on the heels of a
better than 25 percent decline in the stock on Friday and the
Monday prior to Christmas. The shift in investor sentiment,
however, has still left the stock down roughly 13 percent over
the last 5 trading days. This name will likely continue to be
very active going forward as the company prepares for its crucial
January 30 launch of BlackBerry 10.
While Research in Motion's most recent earnings report left
investors disappointed, the launch of BlackBerry 10 may be enough
to provide some optimism in the stock in the near-term.
For the third-quarter, Research in Motion reported net income
of $9 million or $0.02 per share, compared to $265 million or
$0.51 per share, in the year ago period.
On an adjusted basis, which is comparable to analysts'
consensus, Research in Motion reported a loss of $114 million or
$0.22 per share. This was well ahead of Wall Street analysts'
consensus earnings per share expectations of a loss of $0.35.
Sales in the period were $2.7 billion, a 47 percent decline
versus the $5.2 billion the company reported last year. This also
beat analysts' consensus revenue estimates of $2.66 billion.
Research in Motion said that it expects further pressure on
operating results ahead of its launch of BlackBerry 10 in the
fourth quarter. The company added that it anticipates it will
report an operating loss in the fourth quarter.
BlackBerry 10 is expected to launch on January 30, 2013 and
will be critical to to the future of Research in Motion as a
going concern. The stock has been extremely volatile in 2012,
trading in a range between $6.22 and $17.96 as the company's
operating position continues to deteriorate. BlackBerry 10 is
likely Research in Motion's last chance to save itself. The
product could potentially do just that.
While RIMM's market share has collapsed in the United States
amid competition from iPhone and Google's (NASDAQ:
) Android devices, Research in Motion still maintains a strong
position in international markets. A successful BB10 launch could
prevent the BlackBerry ecosystem from being relegated to the
dustbin of history in developed markets and allow the company to
re-establish a profitable niche in the smartphone market.
At the very least, the upcoming launch date provides a
catalyst for the stock in the month of January. While many
observers may be skeptical about the success of BlackBerry 10,
the stock could see marginal buying in coming weeks from
investors who think they can play a rally into the release date
before flipping out of the stock for a quick profit. In the
longer-term, Research in Motion's outlook continues to look
bleak, but this name could have a big month and should remain
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