“Research In Motion Ltd. shares dropped sharply in heavy trading late Thursday after the mobile-devices maker issued a third-quarter outlook that fell short of Wall Street’s projections,” Carla Mozee reports for MarketWatch.
MacDailyNews Take: How ’bout: “Buy One, Get Two Free?” (smirk)
Mozee reports, “RIM (RIMM) was last down 9.7% to $75.09, with more than 4 million shares exchanged. The company said it expects third-quarter earnings of $1 to $1.08 a share. Analysts polled by Thomson Reuters currently expect earnings of $1.05 a share. The company also said it expects revenue of $3.6 billion to $3.85 billion, which is below the current consensus estimate for sales of $3.92 billion.”
“Earnings were $475.6 million, or 83 cents a share, compared with $495.5 million, or 86 cents a share, for the same period last year,” Mozee reports. “Excluding a $112.8 million related to the settlement of a patent dispute with Visto Corp., the company said earnings would have been $588.4 million, or $1.03 a share.”
Full article here.
Dan Gallagher reports for MarketWatch, “‘Sales were a little weaker than I thought, though gross margins were pretty good, which is usually the issue with RIM,’ said Tavis McCourt of Morgan Keegan. ‘I think the numbers were good, just weren’t as good as investors wanted to believe they were.'”
“RIM faced stronger competition in the recent quarter. Apple Inc. launched its iPhone 3GS in mid-June,” Gallagher reports. “For the August quarter, RIM said it shipped approximately 8.3 million smartphone devices, with 3.8 million new subscribers added. Analysts were expecting 4 million new subscribers with unit shipments between 8.5 million and 8.6 million, on average.”
Full article here.
MacDailyNews Take: RIM just got 10% more appetizing; will Microsoft bite?
Wow, looks like they fell right off the rim of that chart.
Humpty Dumpty?
“I think the numbers were good, just weren’t as good as investors (AND THE TALKING HEADS) wanted to believe they were.” Maybe if they start doing a buy 1 get 3 FREE.
It is all about the apps now. This game has been over for a long time. The iPhone is a small hand held multi-touch Mac OS X computer. The Blackberry is NOT!
Blackberry made it’s run being the best device for corporate email, contacts, and other basic info.
That’s just nowhere near enough when you have an iPhone and all the amazing things an iPhone can do. Even without the 75,000+ apps, the iPhone is a better device.
Now factor in the apps, and it’s not even a contest.
Watch the smart phones and computers on TV shows. They are mainly Apple products! That is what people see and want. The Windows industrial strength business OS is being marketed buy a little girl putting together kitten and marshmallow pictures or movies. Idiots!
Apple has the smart phone, entertainment and soon the computer market all wrapped up. What market do they want next!
@Jersey_Trader The TV in your living room, I suspect.
Probably gonna hafta drop the bid for that hockey team.
No Hamilton Coyotes for you!
RIM is relying on the corporate CIO/IT chicken boneless God syndrome slaves to keep on buying their BES more like BS services. Just like the Windows mentality. They can’t think beyond their nose.
Yes Rob, I have a Sony WEGA 60 TV in my living room. But, every one with and without 60″ HD TV can see the change in technology used by the entertainment industry. There is an Apple logo on them and RIMM and Microsoft see the tsunami that is hitting the beach!
Guidance was low.
What’s interesting are all those people who get a BB who don’t subscribe, 4.5M. Why?
Am I the only one who saw RIM selling over 8 million devices, almost half of those to NEW customers? Now, I know that Apple only has one model (actually, two, if you count 3G), vs. RIM’s stable of devices, but that really cannot be the point here. They are both addressing the same market space and RIM is (for now) still winning.
We can all argue (and with merit) that Apple is only getting started, and RIM is facing a dead-end street, but we’ve been trying to argue that for the past year or two, and RIM continued to sell massive numbers of devices.
The point is, in may ways, RIM may appear today much like MS; they have an incumbent position, their primary target is enterprise, they’re trying, with some success, to attract consumers, but they don’t have a roadmap that can protect the incumbent position. The difference between RIM and MS is that RIM is still growing very well (compared to MS). They’re still showing solid profits and increasing the absolute numbers. The market share isn’t rapidly eroding, as much as we would like, and they seem to be here to stay for at least a little while longer.
The 10% drop is just a 10% drop in stock. It’ll be back tomorrow (most likely), since nothing fundamentally changed with the company today.
More like they fell off the RIMM and into the crapper hole!
Don’t read to much into this. Day-to-day Stock prices are meaningless. RIMM is a very strong company and has a great product that is in demand. AAPL has seen more days like this than I can count. Look at the long term trend. RIMM is doing very well.
It would be reasonable to measure your glee over this event.
FASB changed an accounting standard which raises Apple’s earnings per share estimate by 40-50% per year and its shares are off 4% since intraday yesterday.
Perhaps you might iCal this to revisit in mid November.
wow
I think this is just Wall St overcorrecting a bit upon realizing that they haven’t noticed the actual marketplace shifting out from beneath them.
That chart looks a lot like what happens to Wiley Coyote when he doesn’t look where he’s running. I picture the RIM representative presenting their numbers, waiting a beat, then whipping out a sign that says “Uh-Oh.”
@ Predrag
Analyst and the market often project future trends and price the stock accordingly. RIM products are sold by many more carriers in the US market and they had to resort to BOGO gimmickry to keep up their inventory. This could not have helped their margins. Their premier product (the Storm) is being sold as a crippled device by a controlling carrier and growth of their echo system has been stunted. While they still serve the corporate market well, the IPhone it seems has more than caught up and some may even say have surpassed RIM’s offerings. Security concerns aside (which I think are way overblown) RIM has shown it’s vulnerability when it’s servers in Canada have a hiccup too often. As the IPhone gains traction where do you think this stock is going? RIM may well do to follow the Apple model and pare it’s product line, maybe develop a Linux base operating system and start partnering with strong content provider. You can see how well the U2 think worked out for them.
Predrag makes a good point. Bobchr doesn’t understand the report – margins were actually better than anticipated. RIM hit all of their metrics relative to the guidance that was given for this quarter. Perhaps the market got a little ahead of itself and expected more.
This quarter was perfectly decent. And they still sold 8.3 mln devices and said they expected 9.2-9.7 devices to be sold in the next quarter. This is not a weak company. MDN will do its thing but the headline does not mean anything relative to the fundamentals of the business, just the market’s perception. RIM will be just fine and will most likely continue to sell many more devices each quarter than Apple for a while. The good news is that both can do really well, but I know that’s blasphemy on this site!
Their revenue was up 37%. Net earnings were up. They added millions of new owners. If not for a settlement, they would have shattered the analysts expectations. But because some analysts predicted they would do even better (you know, the same ones MDN rips when they predict something wrong about Apple), somehow MDN crows about it. Hey MDN, in case you didn’t notice, Apple shares were down today too. A one day blip in stock prices is meaningless. But fanboys never let facts get in the way of competitor bashing.
Ronin,
On this planet, a 10% drop is not a “blip.”
Apple and RIM are competing for the same cell phone customers but they are not competing with the same type of product.
The only true smartphone on the market is the iPhone. BBs are no longer in the same category. A BB is what you buy when the carrier you must use does not sell iPhones.
If iPhones were available from all carriers, RIM truly would be jumping off a cliff.
Blackberry users, as a whole, really like their phones. I’m always surprised by this, since I’ve had an iPhone since day one. No one needs to convince me of the obvious superiority of the platform. Nevertheless, there are many stubborn people who just don’t get it. They’ll say they don’t need a phone that does all that, or they type much faster with real buttons. I know many, many people who choose these inferior products. And the funny thing is they CHOOSE to pay the same data rates as iPhone users but waste all the potential!
Go figure.
“MacDailyNews Take: RIM just got 10% more appetizing; will Microsoft bite?”
Be careful for what you wish for – you might just get it.
Ballmer’s spending money like drunken sailor of late, with Electronic Arts and a big chunk of Yahoo! Seeing the Microsoft Pink phones earlier today, I am singularly unimpressed. My hunch is that Wall Street will be too. I am only mildly taken by RIM’s offerings. But you can’t deny their market share and the lock they try to institute with their BES server software in corporations – sound familiar? I would see Ballmer getting greedy about this. It would not wipe Apple off the road, but it would make things a bit more complicated.
Stay humble. Be nimble. And kick butt.
I’m not a RIM proponent, but I do hope Balsillie stays rich enough to get the Hamilton Steel Coyotes set up to finally extinguish the Toronto MakeMeLaffs.
(I pity any non-hockey fans who are trying to make sense of what I just typed.)
This week I helped my client get an iPhone at the Apple shop here in the nation’s capital (Wonderland on the Rideau). The iPhone specialist said they have enough iPhone stock to supply their customers. When asked if Rogers had any (any at all), he said, with a slight smile, no, none. So if a customer wants an iPhone at a Rogers outlet (far more outlets than Apple Stores in Canada), it will have to be the $99 version, which they do have. So RIM doesn’t face as much competition from Apple’s iPhone as would be the case if there actually was a 3G S model to buy at Rogers, and so its sales are doing better now than they will when inventory exceeds sales. In the meantime, a Rogers outlet will probably suggest a Blackberry in the alternative instead of the $99 iPhone 3G. What will happen when RIM faces real competition is anyone’s guess. As a touch user myself (I don’t need a cell phone (they don’t work at all in most of cottage country) I wouldn’t know how to use a Blackberry; whereas learning to use an iPhone would be instantaneous. And I think that tells us where RIM’s stock is headed if ever the day comes that Apple has excess inventory.
@broker
Any one day stock rise/fall is a blip.
“Don’t read to much into this. Day-to-day Stock prices are meaningless. RIMM is a very strong company and has a great product that is in demand. AAPL has seen more days like this than I can count. Look at the long term trend. RIMM is doing very well”
It’s a harbinger of a change in the trend. RIM is a growth stock with a high P/E, justified by expectations of healthy future growth. Any hiccup in the growth trend can knock the stock price for a loop, as the previously expected growth rate is no longer “priced in.”
Ronin wriote: “Any one day stock rise/fall is a blip.”
That would make the drops of the stocks that fell on Black Friday, Black Monday, etc. blips as well. Are you really prepared to defend that position?