Research in Motion Earnings Preview: Bold Numbers
RESEARCH IN MOTION (RIMM)
Maker of the BlackBerry, the smart phone of choice for business people.
Reports Q1 '09 earnings Wednesday 6/25 at approx. 410p ET. Conference call at 5p ET.
WHAT WILL MOVE THE STOCK:
HIGH EXPECTATIONS - What's not to like about Research in Motion's recent performance? Revenues and earnings are expected to more than double last year's numbers. Since February 6th, the stock is up nearly 70% (from $84.10). A number of investors are already betting RIMM shares will keep on rolling: vFinance Investments Options Strategist William Lefkowitz says there is significant buying of RIMM calls all the way up to $170 even though the stock has never closed above $145. However, put option action has also been active.
SUBSCRIPTION NUMBERS, PHONES SHIPPED - How many people are using BlackBerries? How many new subscriptions did RIMM get last quarter? After earnings and revenues, the subs figures are probably the most important metrics for assessing RIMM's performance. The company said it expects about 2.2 million new subs in Q1 and a total of 16 million users. Also important: How many BlackBerries were shipped? See Factoids for Q4 subs and shipment figures.
GUIDANCE - When RIMM last reported earnings (April 2), the company gave guidance that was well above analysts' expectations. The guidance was a key factor in RIMM's 6% price jump the next day. Citi Investment Research's Jim Suva is among those expecting "another beat-and-raise quarter" from RIMM. Watch for guidance on EPS, revenues, net new subscriptions and overall subscriptions.
TRIMMABLE EXPENSE OR INDISPENSABLE TOOL? - BlackBerries aren't cheap, especially when a business has hundreds if not thousands of users. As energy costs surge will BlackBerries get targeted by companies looking to trim costs? Don't count on it. Try taking the "crackberry" away from an addicted exec and you'll see what I mean. However, watch the new subscriptions numbers for signs that businesses are trying to rein in costs by restricting new users. Will job cuts in the financial sector cut subscriptions? Will cost concerns affect demand for...
NEW PRODUCT: BOLD - On May 12, RIMM introduced a new high-end phone, the BlackBerry Bold. When will consumers be able to buy it? Speaking of new products...
COMPETITION FROM THE IPHONE - The other gee-whiz smartphone hasn't been able to put a dent in RIMM's core market. The newest iPhone is a step in the right direction, but many businesses users are still put off by the lack of keyboard. Also, Apple must overcome opposition from many IT departments that flat out refused to support the first-generation iPhone.
Q1 EPS up 119% to $0.85, revenues up 110% to $2.273 billion
Q2 EPS up 80% to $0.90, revenues up 78% to $2.439 billion
FY 09 EPS up 72% to $3.88, revenues up 72% to $10.358 billion
Source: Thomson Reuters
Year-ago actuals: Q2 EPS $0.39, Rev. $1.082 billion
*All estimates are current as of 6/24 and subject to change.*
SUBSCRIPTION NUMBERS - Last quarter, RIMM said it added about 2.18 million new subscribers, growing the total subscriber base to more than 14 million. In Q4, RIMM said it shipped 4.4 million smartphones.