Research In Motion Ltd. (NASDAQ:RIMM) is set to report earnings after today’s close in what is going to be one of the last big tech reports of 2007. For its November-end Q3, First Call has estimates pegged at $0.62 EPS on revenues of $1.65 Billion. Its own guidance had been for $0.59 to $0.63 on $1.6 to $1.67 Billion in revenues. This one is still one of Cramer’s "New Horsemen of Tech" from earlier.
Next quarter (Q4) estimates are $0.65 EPS on revenues of $1.75 Billion (so $2.17 fiscal EPS and $5.86 Billion revenues). It forecast $2.25 for fiscal FEB-2008 at its last report. We do not know if R-I-M will step out on a limb for more than a year out but the FEB-2009 Fiscal targets from the street are $3.25 EPS on $8.7 Billion revenues.
While 2007 has still seen more than a 100% gain for the stock, itschart fell out of a very strong up-trend that had been in place forover 6 months. Its 52-week trading range is $39.92 to $137.01, so evenbefore todays 3% gains to $105.25 it is still up a lot. Its simple50-day moving average is $112.72, and that may be more indicative thanits $77.02 200-day moving average.
Analysts are still positive on the stock with an average $125+ target,and there are some calls looking for $170 and $180 in the coming year.Morgan Keegan was the last research change as it downgraded shares to aMarket Perform rating about two weeks ago. Its market cap is now $59Billion after today’s gains.
Options expire tomorrow, but on a static basis it appears that theoptions traders are braced for this to move up to $8.50 or $9.00 ineither direction.
We are looking for a "beat and raise" quarter out of RIM, otherwise the valuations may be noted by more analysts on the street. It wasthought that Palm (NASSDAQ:PALM) was going to be a new threat on theretail level with that new Palm Centro but Palm’s FUBAR-Quarter reallytook away those fears. The prized iPhone from Apple (NASDAQ: AAPL) hasof course been impossible to ignore as a retail winner, although thathas still yet to be seen as an enterprise level threat where businessesare turning in their Blackberry phones. That may be happening on aretail basis where RIM is trying to get a stronger foothold now, butthe iPhone has not on been encroaching on RIM’s key enterprise level.We just covered this today, but there are reports that RIM will launcha touch-screen phone to rival the iPhone for consumers in early 2008.
Earlier this week there were rumors of a restatement coming, but if yougo back and look over the past releases it seems that RIM tried to makeits financial reports entirely current back in may and maybe later in2007. There is always a risk that there were other restatements thathadn’t been disclosed, but we’d probably focus on the general pictureif there is nothing major there.
RIM had roughly 10.5 million subscribers at the end of last quarter.The last telegraph of shipments we saw back in October was to ship 13.5million handsets in 2008, up from under 13 million on previous target.Lastly, management did enter into 10b5-1 preset trading plans to sellshares in late November.
Jon C. Ogg
December 20, 2007
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