R-I-M Sees Profit Taking on Initial Earnings Release

Research-in-Motion (RIMM-NASDAQ) posted earnings: $1.01 before items and net $0.99 EPS & $930.4M revenues; expectations were $1.00 EPS & $935.25 million.  RIMM shares are down 6% to just under $137.00 ahead of its quarterly conference call.

While the iPhone is coming, investors were expecting RIMM to remain positive.  Options traders were braced for the stock to fall roughly $5.60 as of the close.  The stock was just at a new high earlier today before the market sold off.  It added 1.02 million new subscribers as opposed to estimates of roughly 1 million.  RIMM’s guidance for the coming quarter is $1.01-$1.09 compared to $1.04 estimates; revenues expected to be $1.025-1.075 Billion  vs $995 million estimates.  The SEC inquiry was converted to formal, although many on the street were expecting that.  This looks like the street is selling over not exceeding estimates and in-line guidance that may be a tad ahead.  Thats what can happen when your stock is on all-time highs.

We’ll have to see what the company is looking for as far as shipped units for the coming quarter, with the street hoping for somewhere in the vicinity of 2 million devices.

Jon C. Ogg
April 11, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.