1. KodyShadow's Avatar
    Research in Motion shares tumble 13 per cent after warning of lower profits
    at 10:09 on April 29, 2011, EDT.
    The Canadian Press
    Share|TORONTO - Shares in BlackBerry-maker Research in Motion (TSX:RIM) fell sharply in early trading Friday, a day after the BlackBerry maker warned it will likely report lower first-quarter profits and revenue than it had previously expected.

    RIM cut its financial guidance for both earnings per share and revenue after markets closed Thursday, saying that shipments of BlackBerry smartphones would likely be lower than initially expected. The company also anticipates a lower average selling price for the devices.

    RIM stock fell $7.25 or 13.5 per cent to $46.58 in heavy trading on the Toronto Stock Exchange.

    The Waterloo, Ont.-based company has been the dominant player in the business smartphone arena for a decade, but competition has been building steadily, not just from Apple iPhone but also phones that use Google's Android operating system.

    RIM's PlayBook tablet debuted to little fanfare and some negative reviews earlier this month, while Apple's iPad 2 was greeted with huge demand from the consumer market. RIM says PlayBook shipments in the quarter continue to be in line with its expectations, but the company hasn't said how many units it expects to ship in the quarter ended May 28.

    Analysts took a dim view of RIM's ability to be relevant in the highly competitive smartphone market, where it faces stiff competition from a number of competitors particularly Apple, maker of the popular iPhone and iPad.

    National Bank Financial analyst Kris Thompson said he's "throwing in the towel for now" and can't recommend the stock due to RIM's "poor execution" on new devices.

    "Consumers are not listening nor waiting," Thompson wrote in a research note.

    "RIM does not seem to be up to the challenge. Consumers are voting with their dollars, and they're being spent in Apple stores and on Google's Android platform."

    Thompson has downgraded his expectations for RIM's stock price to around $55.

    RBC Capital Markets analyst Mike Abramsky, who had previously pegged RIM as an outperforming stock with a target price of $90, has lowered his valuation to $50, saying: "We were wrong, as misexecution has undermined sentiment recovery."

    When asked about the reason behind the shipment delays, co-CEO Jim Balsillie said its new BlackBerry smartphone includes major upgrades and the delays were unrelated to wireless carriers' interest in the device.

    The carriers "want it sooner and we want it sooner, but there's an innovation cycle that's at play and there are certification elements at play and that's reality for us, and we're affected by it,'' he said on a conference call late Thursday.

    "I'm not going to duck that it's a big innovation exercise."

    RIM said it now expects fully diluted earnings per share to be in the range of US$1.30 to $1.37 for the first quarter of its 2012 fiscal year, which ends May 28. That's lower than the range of $1.47 to $1.55 previously forecast.

    Revenue will be slightly below the range of US$5.2 billion to US$5.6 billion.

    RIM is expected to introduce a new line of more powerful smartphones, dubbed "super phones'' with a new operating system that's based on the system in its PlayBook computer tablet. The new line of phones are expected to support applications for Google's Android operating system.

    The BlackBerry maker has also been relying on international sales for much of its growth which often means lower prices for its devices, which are adapted to the needs of those local markets.


    TELUS, news, headlines, stories, breaking, life, technology, science
    04-29-11 10:06 AM
  2. mfm77's Avatar
    Thanks for the info. It's interesting that they refer to the "super phones" but - perhaps due to a lack of information - have no clear-cut date for their release. The Wall Street Journal states that those phones will come out in 2012, which for most consumers will be "too little, too late."

    In a Wall Street Journal online article about this same issue, Jim Baisillie states the following: "We feel fantastic about the future of the company and its prospects," Mr. Balsillie said on the call. "I'll put it in a simple word. It's transition, and that's what it is. And that's why you see the volume of units being what they are. But we still are forecasting to grow substantially this year. We're coming off another great year of growth. And we're investing very heavily because opening up a new category, bringing in a new platform, it's just not a time for half measures."

    Add the above, specifically the "transition" part, to the quote in the story posted in the forum (the one about the "innovation exercise"), and you see the problem: RIM has been in "transition" and attempting "innovation" in the same amount of time that it took Android and iOs to make blazing strides in the market. Maybe I'm wrong, but there's something the RIM executives just don't see in the ever-changing consumer marketplace.
    04-29-11 10:58 AM
  3. greggebhardt's Avatar
    I made a lot of money on RIM stock a few years ago but when the "corps" pulled back, I knew it would hurt them.

    I am more worried about the PlayBook flopping and putting them out of business.
    04-29-11 12:01 PM
  4. valorian's Avatar
    I really don't think RIM is going out of business.

    RIM right now reminds me of Motorola during their Razr days. Motorola was sinking fast when they road the coat tails of the Razr phone too long. Everyone was saying Motorola was going to get bought out. This never happened and I don't see it happening to RIM either. RIM right now is in a rebuilding / restructuring phase just like Motorola was (still is) back then.
    04-29-11 12:25 PM
  5. valorian's Avatar
    But Motorola just announced a loss of $80 million this past quarter. All these years, and they're still in the doldrums of the RAZR days.
    Yes, that's why I said they are still rebuilding. And yes they announced a loss but this was significantly less than this time last year showing they are making improvements. That's why Motorola Mobility is up over $2 today.
    04-29-11 01:19 PM
  6. hootyhoo's Avatar
    Moto also has over 3 billion in cash to tide them over.

    Posted from my CrackBerry at wapforums.crackberry.com
    04-29-11 01:42 PM
  7. Daniel Ratcliffe's Avatar
    I wonder what would happen if RIM stocks fell to $0... Don't shoot me, it's just a passing thought I've had, and given I don't trade stocks or showing interest in them, don't know what that would mean or cause.
    04-29-11 01:49 PM
  8. valorian's Avatar
    I wonder what would happen if RIM stocks fell to $0... Don't shoot me, it's just a passing thought I've had, and given I don't trade stocks or showing interest in them, don't know what that would mean or cause.
    Usually stocks don't get to $0. If a stock gets below $1 the company is sent a delisting notice. If the company does not show improvement in 1 year after the notice they are delisted.
    04-29-11 02:00 PM
  9. valorian's Avatar
    Moto also has over 3 billion in cash to tide them over.

    Posted from my CrackBerry at wapforums.crackberry.com
    Anyone know the RIM's cash reserves are? With the quarterly results they were posting, I'm sure they have a significant amount.
    04-29-11 02:02 PM
  10. greggebhardt's Avatar
    I am just glad I bought it in the $55 per share range and sold it for $139.

    I am not buying again, not with todays stock market. I fear we are going to see a large "adjustment" soon, it is too high for what is going on in the US today.
    Last edited by greggebhardt; 04-29-11 at 02:16 PM.
    04-29-11 02:14 PM
  11. q649's Avatar
    Instead of telling you, I'll show you how to find that info yourself.

    Go to google finance, (or yahoo), look up the company stock.

    Click on the Financials section.

    Open the Balance sheet.

    Look for the "Cash and Short Term Investments" line, and you'll see
    the last reported total = $2,121.00 (in Millions of $)
    04-29-11 02:15 PM
  12. lnichols's Avatar
    Anyone know the RIM's cash reserves are? With the quarterly results they were posting, I'm sure they have a significant amount.
    I believe they announced approx $2.7 Billion at the last earnings call in Cash.
    04-29-11 02:21 PM
LINK TO POST COPIED TO CLIPBOARD