Research In Motion, This Week's Earnings Spotlight (RIMM, AAPL, PALM)

On Wednesday afternoon we’ll get to see earnings out of Research In Motion Ltd. (NASDAQ: RIMM). The estimates from First Call are $0.70 EPS on $1.85 billion in revenues.  Next quarter estimates are $0.74 EPS on $1.99 billion in revenues. Estimates for fiscal Feb-2009 are $3.46 EPS on $9.18 billion in revenues.  All of these estimates may be slightly different by the time that earnings actually get here, and they may very well be different with slight revisions on Monday.  We’ follow up with more chart and options analysis as Wednesday afternoon approaches.

Despite woes of many other cellular phone companies, R-I-M raised its guidance very late in February.  It said it sees roughly 14 million subscribers for the quarter end.  It also put revenue expectations in the $1.80 to $1.87 Billion and its sees $0.66 to $0.70 per share diluted; First Call had estimates at the time as $1.85 Billion revenues and $0.69 EPS. 

When it raised its subscriber targets shares were at $104.55 after the pop from the news.  Shares closed Friday at $115.34.  R-I-M sits well above key longer-term moving averages as its 200-day moving average was $94.34 on Friday and the 50-day moving average was $98.81 as of Friday.  Those levels should ratchet slightly higher by Wednesday.  Analysts have an average price target north of $136.00.

Despite Palm Inc. (NASDAQ: PALM) not imploding after its earnings a week ago, it is becoming farther and farther behind as a competitor as far as Wall Street is concerned.  The thought had been that Apple Inc. (NASDAQ: AAPL) was going to release its 3G version of the iPhone later in the year.  Now some data points to May.  If this does come out in May, it will be a challenge now that Apple has opened its apps development to outside teams.  But if that doesn’t come out until Q3 or later then R-I-M will have another dominant two quarters of being the smart phone leader on the enterprise level.  As far as whether or not Apple’s 3G iPhone will ever truly challenge the enterprise space, that opinion varies wildly.

Jon C. Ogg
March 30, 2008

Jon Ogg produces the Special Situation Investing Newsletter and he can be reached at [email protected]; he does not own securities in the companies he covers.