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RIM Preview: You Want to Take This Call

RESEARCH IN MOTION (RIMM)

Dominant mobile phone/e-mail solution for businesses. Even though RIM shares have lost a third of their value in three months, the company still has a market capitalization over $55 billion.

Reports Q2 '09 earnings Thursday 9/25 at approx. 410p ET. Conference call at 5p ET.

WHAT WILL MOVE THE STOCK:

REMEMBER FUNDAMENTALS? - The market may not be focusing on fundamentals right now, but this is what solid numbers look like. Research in Motion's Q2 earnings are expected to jump 74% and revenues to rise 89% from year-ago levels. Full-year fiscal '09 estimates are only slightly lower, making RIM shares look pretty cheap at a 25x forward 12-month price-to-earnings ratio.

HOW ARE SALES? - Keep an eye on the number of new subscribers and number of phones shipped. RBC Capital's Mike Abramsky is looking for 2.6 million new subs and 6.3 million phones shipped. All the numbers mentioned so far point to a company that's thriving despite worries about the U.S. economy. That said, the credit crisis is raising new concerns about demand for pricey mobile phones. But those concerns may be overblown. Jim Goldman points to some great new research by Abramsky that finds no drop off in consumers' desire to buy a smart phone. You can find the rest of Jim's RIM preview here.

GUIDANCE - What does RIMM expect for Q3? The company normally gives EPS and revenue guidance for the next quarter in the earnings release.

COMPETITION - When Apple and Googleset their sights on your main market, of course there's reason for concern. But RIMM is working hard to stay ahead with new phones like the Bold. Speaking of which...

WHERE IS THE BOLD? - RIM's much-anticipated Bold (big touch screen = iPhone/G1 competition = lust item for corporate Blackberry addicts) was supposed to be released in the U.S. this quarter, but won't make it to store shelves until sometime later this year (The Bold is on sale in Europe and Canada). That said, other interesting new products, including the first flip-phone Blackberry (yes, it's called the Flip), the Storm and a mini-Bold called the Javelin, are all on the way.

ESTIMATES:

Q2 EPS up 74% to $0.87, revenues up 89% to $2.595 billion

Q3 EPS up 51% to $0.98, revenues up 76% to $2.944 billion

FY 09 EPS up 68% to $3.80, revenues up 84% to $11.054 billion

Source: Thomson Reuters

On June 25th, RIMM said it expected Q2 EPS between $0.84 and $0.89 and Q2 revenues between $2.550 billion and $2.650 billion.

Year-ago actuals: Q2 EPS $0.50, revenues $1.372 billion

FACTOIDS:

DOWN 35% IN 3 MONTHS - This quarter wasn't kind to RIM shareholders. On June 19, RIM shares hit an all-time intraday high of $148.13 and closing high of $147.55. RIM closed Wednesday at $96.71, nearly 35% below the June peaks.

BOUNCE OFF THE BOTTOM - Last Thursday, RIM traded briefly below $90 a share... the lowest level since February.

CRAMER LIKES IT - Several times this month (including last night), Jim Cramer gave RIM shares a thumbs up on "Mad Money."

THE CRACKBERRY ADDICTION SPREADS - New evidence that Blackberries (and other smart phones) are increasingly seen as "must have" business tools: 40% of people with such devices check their work e-mail often on weekends, according to a study by the Pew Internet and American Life Project. A quarter said they checked often on vacations. My reaction: only 40%? 'Looks like there's plenty of room for growth.

Comments? Send them to bythenumbers@cnbc.com

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