Research in Motion (RIMM) gets crushed
Shares of Research in Motion Ltd. (NASDAQ: RIMM) are getting pummeled in after-hours trading after the maker of the no-longer edgy BlackBerry reported disappointing results and gave lackluster guidance.
Net income at the Ontario-based company in the fiscal first quarter rose to $482.5 million,or 84 cents per share, versus $223.2 million, or 32 cents per share, a year earlier. Revenue soared 107% to $2.24 billion as the company shipped about 5.4 million devices. Though these results were impressive, they were not good enough for Wall Street.
Analysts surveyed by Bloomberg News were expecting RIM to report earnings of 85 cents on revenue of $2.27 billion. Moreover, the company forecast second quarter profit of between 84 and 89 cents per share, missing the Bloomberg estimate of 92 cents. The revenue forecast of $2.55 billion to $2.66 billion, however, is slightly better than the $2.44 billion analysts had expected.
The problem that RIM has is that it's not Apple Inc. (NASDAQ: AAPL), which is now trying to lure more corporate customers with the latest version of the iPhone. In baseball terms, RIMM is like the New York Mets, a once mighty team that has fallen on hard times. Apple, on the other hand, is the high-tech world's equivalent of the Boston Red Sox, a once lowly team that now dominates the league.
Picture that the RIM team and the Apple team are playing each other in a real baseball game. RIM is trailing Apple in the bottom of the ninth, the bases are loaded with two outs. RIM management is trying to convince investors that it can hit a home run in this situation, while Wall Street is sure the company will strike out.
RIMM shares are down over 8.5% in after-hours trading to about $130. It closed at $142.336.
Here is Research in Motion earnings transcript.
Net income at the Ontario-based company in the fiscal first quarter rose to $482.5 million,or 84 cents per share, versus $223.2 million, or 32 cents per share, a year earlier. Revenue soared 107% to $2.24 billion as the company shipped about 5.4 million devices. Though these results were impressive, they were not good enough for Wall Street.
Analysts surveyed by Bloomberg News were expecting RIM to report earnings of 85 cents on revenue of $2.27 billion. Moreover, the company forecast second quarter profit of between 84 and 89 cents per share, missing the Bloomberg estimate of 92 cents. The revenue forecast of $2.55 billion to $2.66 billion, however, is slightly better than the $2.44 billion analysts had expected.
The problem that RIM has is that it's not Apple Inc. (NASDAQ: AAPL), which is now trying to lure more corporate customers with the latest version of the iPhone. In baseball terms, RIMM is like the New York Mets, a once mighty team that has fallen on hard times. Apple, on the other hand, is the high-tech world's equivalent of the Boston Red Sox, a once lowly team that now dominates the league.
Picture that the RIM team and the Apple team are playing each other in a real baseball game. RIM is trailing Apple in the bottom of the ninth, the bases are loaded with two outs. RIM management is trying to convince investors that it can hit a home run in this situation, while Wall Street is sure the company will strike out.
RIMM shares are down over 8.5% in after-hours trading to about $130. It closed at $142.336.
Here is Research in Motion earnings transcript.











Reader Comments (Page 1 of 1)
6-26-2008 @ 12:42AM
Tom said...
Rimm ran up 75% in recent months; far out pacing the market in general. The baseball analogy of Rimm to Apple is laughable. If Wall street is so "down " on Rimm, why is the stock up 75%. Ironic, i read the same #$%^ when Apple was $120.00, that Rimm was crushing it in the market place. NOw VISA VERSA in 2 months? Sales +107% YOY. YOu make it sound like RImm is going out of business.
6-26-2008 @ 10:43AM
Beltway Greg said...
Man-up boys and girls. Buy some RIMM. Doubt it will finish below $129.00 today. Folks are getting irrational. Guidance was actually good.
Beltway Greg
7-11-2008 @ 12:37PM
Crapple said...
RIMM stock is "down" after dropping 15% right after going up almost 80% ?? Have you heard of the word "fluctuation"?
I've been disappointed with Apple products too many times to ever go back there: and now they are bringing their software/hardware antics to the phone space and I wish their sorry customers well having fun with their "coolness" factor - anyway when they grow up they can buy a real phone :)
Anyway given that RIMM profits are *up*; their market share is *up* (Apple's smart phone U.S. market share dropped in 2008 Q1); RIMM has a more efficient cost structure than fruitco; and RIMM has some very good engineers getting ready to launch a whole slate of new products this might be a good time buy RIMM stock.
Apple will make crap loads more money after all it is now a "big company" but it's a pretty scattered, sort of like Sony but with a lot of fan boys. How this is going to "crush" RIMM is sort of an imaginary "war story" thing the media likes to cover. Sort of like how Apple's laptops have "crushed" Lenovo :-P