[TechAlberta]

Just for argument�s sake, said Byron Capital's Tom Astle in a research note today, �let�s use our wildest imagination to see we can come up with any potential positives� he opines might lift RIM off its book value.

Byron's Astle: Five Long Shot Positives that Could Surprise in RIM's Q4

[kbz1960]

For those that don't want to click.

Byron�s Astle: Five Long Shot Positives that Could Surprise in RIM�s Q4
March 27, 2012 By Cantech 0 Comments and 0 Reactions

Research in Motion's Q4, 2012 will be new CEO Thorsten Heins' first at the helm.

Research in Motion's Q4, 2012 will be new CEO Thorsten Heins' first at the helm.
After the market close on Thursday, Research in Motion (TSX:RIM) will announce its Q4 2012 and full fiscal year results.

The negativity that has dogged the Waterloo mobile device maker for the better part of two years has now reached near consensus. JMP Securities analyst Alex Gauna�s take on the matter is a common one. �Its going to be a weak quarter�� he told Alastair Sharp of Reuters, adding: �It�s going to continue to amplify fears�

Byron Capital�s Tom Astle doesn�t have a rating on Research in Motion, but he watches the company closely. Astle says that while RIM appears to be supported on the downside by a tangible book value of $12 plus a patent value he estimates at $2, its a good thing, because its hard to imagine any other upside right now. But, just for argument�s sake, said Astle in a research note today, �let�s use our wildest imagination to see we can come up with any potential positives� he opines might lift RIM off its book value.

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Astle came up with five things that could save the company from another �crushing quarter�. While he assigns varying levels of hope to each, it is clear the Byron analyst doesn�t believe any of them are as much as an an even proposition.

First, says Astle, there�s the possibility that RIM, which he says couldn�t even �make it to supper on time last year� might actually be on track with BlackBerry 10. The Byron analyst says he is encouraged that RIM has announced it will offer a BB10 prototype at its upcoming developer�s conference.

The second longshot he mentions is that the BlackBerry Playbook incentives may have actually worked. Astle points to the low potential for downside surprise here because the company took a writedown on the device in the last quarter.

The third thing Astle wonders aloud is �What if There Are Signs the User Base Is Stabilizing?� He says we may be getting to a point where the user count has stopped falling and only hard-core crackberry users are left on the platform.

Astle�s fourth point is about emerging markets. As we pointed out recently in Cantech Letter, RIM is the top device in many countries with large populations and low rates of smart phone penetration. Could the numbers coming back from places Indonesia and India be better than expected?

Astle�s last point is that, unlike other recent quarters, RIM didn�t issue an earnings warning. �What if analysts actually had to raise their estimates? he asks.

Share of Research in Motion on the TSX closed today down .6% to $13.82.

[madman0141]

I like that part about only hardcore users are left. Perhaps the dead wood is almost gone and now they can build the devices we want. As long as we don't get a AppleBerry I will be there.

[Thunderbuck]

Great article. Frankly, I think most of the points listed may very well prove true.

On the issue of execution: note who the new CEO is. He's the former COO. If he wasn't responsible for RIM's horrendous execution over the past couple of years, he'd know what it would take to fix it. I think Thor had a plan, it got put into place last fall, and it's turned the company around. Analysts, understandably, will want some hard figures before they dare be optimistic. I respect that, but I don't agree.

I believe Playbook sales WILL be a bright spot in the earnings announcement, though I don't dare guess at actual numbers.

On the point about revising guidance: I'm hoping this is a cause for optimism as well. However, it is a new CEO, and there may be new policy in place, particularly since the company is still in crisis mode. It could be that they're just playing their cards close to the chest. The danger with that is that if they DO come in low, it would wipe out what little trust and goodwill they've been able to recover since Thor took over.

I guess we'll see soon...

[anthogag]

There's no need to issue a warning of bad news. That's lame.

RIM isn't meeting with analysts before BlackBerry World because they really don't have to.

Why give ammunition to the haters

Playbook sales should be a bright spot. And it's an excellent sign of progress for RIM to give developers BB10 betas in May.

[BBThemes]

umm he seems mistaken, i dont recall the userbase dropping at all. at least not in net terms.

[Thunderbuck]

There's no need to issue a warning of bad news. That's lame.

RIM isn't meeting with analysts before BlackBerry World because they really don't have to.

Why give ammunition to the haters

Playbook sales should be a bright spot. And it's an excellent sign of progress for RIM to give developers BB10 betas in May.

There's a difference between that announcement of the analysts' presentation delay and any discussion of Q4 guidance. If RIM comes in below the revenue they projected in the Q3 meeting, they're in serious trouble.

Generally, a company that expects to come in under guidance will restate guidance to reflect the change. In some cases, companies have restated guidance even if they did expect to come in at the low range of their target range.

We'll have an answer on this Thursday afternoon, but basically if RIM doesn't report revenue that's solidly in the range they stated, we could see their shares trading below $10. Worse, Heins has been demonstrating a disciplined approach since taking over as CEO, and any trust he's built would be completely shot.

The Q4 conference call on Thursday may be the most important meeting in RIM's history.