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Tech Check
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CNBC.com |
] after a raucous quarter that saw shares dip into the low $80s before launching their recent recovery over the past week or so. And that's the quirkiness comes in: never during the quarter was there an indication that fundamentals hit any snags, and yet shares suffered a precipitous decline. Now, as investors once again get excited about the RIM story, shares are in recovery mode and the Street is beating an optimistic path to BlackBerry's door.
Many analysts anticipate today's earnings something close to 70 cents a share on $1.85 billion in revenue. But over the last week, a lot of experts have begun ratcheting up expectations. I've spoken to a number of them and they're expecting a penny or two beat, on better than expected revenue.
The other key numbers to watch: subscriptions and unit sales, along with guidance. Pablo Perez-Fernandez at Global Crown Capital is officially looking for 1.98 million new subscribers, but he wouldn't be surprised by a significant upside there, maybe as much as 2.2 million. He's looking for 4.34 million BlackBerrys sold, but 4.5 million is not out of the question.
Guidance is also important: The consensus is 76 cents on $2.017 billion for the company's first fiscal quarter. But Perez-Fernandez tells me he expects RIM to beat those expectations, offering guidance of 77 cents on $2.14 billion. He writes: "We feel compelled to inform investors that every channel check, information from supply chain contacts, and model we have run suggests that RIMM had a very strong February quarter.
The unofficial estimates in the prior two bullets are our 'best' projections as of now. Clearly, we are advising long positions on RIMM ahead of the earnings report." Many on the Street anticipate as many as 2.2 million new subscribers in the current quarter and another 5.2 million devices sold.
And that's thanks in large part to what seems like an endless product pipeline there. A new EVDO Curve unveiled at CTIA, BlackBerrys' move to 3G, new contracts and new service providers getting their hands on new BlackBerry models.
Here's the fun part, as unearthed by one of our Desk Producers Juan Aruego, who puts RIM's quarterly activity into some perspective: While the overall market has been falling, RIM shares have essentially held their ground on a quarter-to-quarter basis. Shares are essentially unchanged since its last earnings report, even though the Dow has fallen 6 percent, the NASDAQ has lost 12 percent and the S&P 500 is off 8 percent.
And compared to other tech stars, RIM is a great performer: While shares have been flat, Apple [AAPL
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] is off 23 percent, Microsoft [MSFT
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] is down 18 percent and Google [GOOG
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] has plunged a whopping 33 percent. And here's the kicker, per Juan: Earnings and revenue should double year-ago results and yet the stock hasn't gone anywhere. How weird is that? A 34x forward P/E probably doesn't help matters, but still!
Meantime, optimism rules RIM today. Not euphoria, but optimism. And with IDC expecting smart phone growth to continue well into 2012, RIM continues to be the best story in the sector. If the company can beat expectations today, even as Apple and its iPhone continue to surge, it'll show that BlackBerry is more than capable of fending off even the toughest competitors.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes