Research-in-Motion (RIMM-NASDAQ; RIM-CN) expectations: $0.94 EPS on revenue of $816 million, up from $0.71 and $560.6 million. The company is expected to say that it added a net 800,000+ subscribers in this last quarter and that the current quarter could be as many as 900,000 net users, although those numbers tend to fluctuate wildly and can create a new focal area other than just the bottom-line metrics. The company’s next quarter expectations are currently $0.98 and $861 million.
Options traders aren’t messing around for RIMM earnings, because it looks like options are pricing in a move of up to $8.50 to $10.00 in either direction. The street is going to focus on its Pearl crossover product that migrates the company from a business-only into a consumer products company, and investors should know that RIMM is up more than 100% since January 1 now that the NTP case has been settled.
Keep in mind that calling RIMM share price reactions ahead of Christmas "volatile" might be the understatement of the year. Most recently price targets from analysts on the street have crept up to $160 and some even higher. RIMM trades at 40 times FEB07 Fiscal earnings on a P/E basis and trades at and roughly a 25.5 forward P/E on a fiscal FEB08 basis, so that trailing P/E of 62 is actually a bit misleading.
Investors should also keep in mind that Ontario securities regulators have recently imposed insider trading bans until some time late in Q1 due to the fact that the company is delinquent in regulatory filings.
Jon C. Ogg
December 20, 2006
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