Research-in-Motion Not Solid Enough (RIMM)

Research in Motion Ltd. (NASDAQ: RIMM) posted disappointing earnings today and shares are paying for it.  The smartphone giant posted $0.84 EPS on $2.24 Billion in revenues.  The First Call estimates were $0.85 EPS on $2.27 Billion in revenues.

During the quarter, RIM shipped approximately 5.4 million devices.  Approximately 2.3 million net new BlackBerry® subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 16 million.

As far as guidance goes, this is a disappointment as well.  Next quarter it sees $0.84 to $0.89 EPS on a range of revenues of $2.55 to $2.65 Billion.  First Call has estimates at quarter’s estimates are $0.90 EPS on $2.44 Billion in revenues.  Net subscriber account additions in the second quarter are expected to be approximately 2.6 million.

Shares closed up 1.3% at $142.34 in regular trading, but shares are taking a breather.  The stock in after-hours activity is down considerably around $130.00 in the initial reaction.  After a major rise that the stock has seen, this sell-off is more than understandable. 

Apple Inc. (NASDAQ: AAPL) is also down marginally after the RIMM report, but only by about 1.5%.

Jon C. Ogg
June 25, 2008