∞ RIM cuts profit outlook, stock price plummets

RIM on Thursday issued a warning to Wall Street that the company would not meet guidance for the first fiscal quarter of 2012.

[ad#Google Adsense 300×250 in story]RIM said the cause for the projected shortfall in Q1 is because of lower shipments of BlackBerrys. The company said shipments are now expected in the lower end of the 13.5 million to 14.5 million forecasted in March.

Although they didn’t give a number, RIM says shipments of PlayBooks is “in line with our previous expectations.”

Fully diluted earnings per share for Q1 are expected to be in the range of $1.30-$1.37, lower than the range of $1.47-$1.55 previously forecasted by the company.

RIM stock has taken a hit in after-hours trading, falling $5.39 or 9.52 percent. It is currently trading at $51.20.

  • STL

    Maybe the technically challenged dual CEOs should get out there and do a spin for the press. The CEOs are so articulate it surely won’t due to much damage. . PlayBook – DOA

  • Larry1962

    Tired Blackberry product line and the Playbook I purchased last week was DEAD out of the box and 4 hours of tech support couldn’t fix it. Luckily I got my money back. Next device won’t be from RIM that’s for sure!

  • Jth9234

    If it keeps plummeting, it might actually be a stock I buy. I think its trading at like 7x’s earnings which is ridiculously cheap considering its overall numbers. Apple also is not overvalued judging by its numbers either despite its meteoric rise in recent years.

    If anyone thinks a corporation with nearly 30 billion dollar market cap and huge market share in the smartphone business is just going to go under, I think they are underestimating the 50 million+ Blackberry users out there.

    I know, people will say that the BB market will dry up, but judging by how many phones they still sell, I doubt it. Also the PB will sell better than the critics would leave you to believe, its actually a good tablet. Also the QNX OS is impressive too, how long before all BB’s start using it?

    • watchdog

      Did you buy Nokia last year? RIM has many similar characteristics to Nokia, and how has Nokia done?

      • Jth9234

        That has a ring of truth to it, but I think BB phones are for the most part still good smartphones where there aren’t any current Nokia phones I would consider using. Also if within the next year future BB’s use the QNX OS seen on the PB, the phones will get even better.

        So based on all the numbers, if this keeps dipping, you might be getting RIMM at a nice discount. How many 30 billion market cap tech stocks can you get at 8x’s earnings? If goes down even more, its tough to resist…

        • If RIM continues to misunderstand the consumer market, it could go down even farther than that. One thing that could make the stock more attractive is less public foolishness from its blithering CEOs.

          Seriously. Their ability to shift focus from the business market to consumers is demonstrably limited. That has to change.

          • Jth9234

            I they are still selling 10-14 million phones a quarter, I highly doubt its just “the business market” buying them.

            I will say their marketing has to improve, their CEO’s also can’t seem to get out of their own way, and they have to get a new line of phones using this QNX OS but retain what people luv about their phones email/messaging/texting on a physical keyboard not pathetically attempting to clone the iPhone like they tried and failed with the Storm models…

          • Anonymous

            Yes, you keep repeating that 10-14 million phones number. I get it; it’s liturgical. What’s their profit off those phones? Where is their real revenue coming from?

          • Jth9234

            Its a factual number, thats a lot of people buying these phones whether you want to acknowledge this or not. I would agree in that their profit per phone is probably not in with the likes of Apple where it has AT&T and Verizon heavily subsidizing their phones to keep the cost down for the consumer.

            Not to say other phones aren’t getting carrier subsidies, but I would bet money Apple has reaped the benefits of this more than anyone else, including RIM.

            RIM is a fascinating stock right now bc its down in the dumps, its hovering towards it 52 week low, which could be time to pounce on it.

            The Playbook I will predict will be the second most popular tablet out there before 2011 is over, the BB phones even with declining market share are still selling a similar number of phones I think the smartphone market is just expanding and BB’s are more of a constant than expanding with it.

            Also RIM is pouring a lot into R&D right now with the QNX OS in their tablet, BB OS7 about ready to come out, and possibly BB phones running QNX OS by next year, thats ambitious.

            As a general rule, you do not buy stocks at 52 week highs and if you do buy them when they are down, you have to ask yourself why they are down and do they have the potential to rebound. If RIMM is generally around low 60’s to high 60’s and you have a shot to get it in the mid 40’s, I dunno, sounds like a steal.

            Trading at 8x’s earning is a tech company with a nearly 30 billion dollar market cap? It has a shot at stealing some market share in the tablet market, I can attest to this, the PB is the real deal.

            I mean Apple is currently the greatest company out there, but thats not generally when you buy it, you missed the move, investing in it now is like trying to catch a falling sword since how much more possible upside can there be? Even if RIM returns to levels in the 60’s and you were buyin it in the 40’s, you are making money…

          • I wasn’t disputing the number’s authenticity. I was making fun of the fact that you keep repeating it, in multiple conversations, as though it’s sufficient as a sole reason to maintain confidence in the company.

            More importantly, I was also asking for more information about RIM’s revenue which you evaded by astroturfing for RIM’s stock. Again.

          • Jth9234

            A few reasons RIM might be worth buying:

            1. Tablet market share, Apple currently hold about 90% market share here, it can only go down not up bc it cannot be that dominant forever, betting on the Playbook being the second best selling tablet means they add significant market share into a business model they have never had before. Which eventually produces new revenue.

              1. The share price generally hovers between low to high 60’s, topping out in the low 70’s. It is approaching a nearly 52 week low plummeting into the 40’s. Of course you always ask why any company is dipping like that, but in this case, it appears much of it could be in R&D and promoting a new device in a new business model. It is selling roughly the same amount of phones it always has. The PE ratio is trading at about 8x’s earnings, thats insanely cheap for such a big tech company.

            If you want all the revenue numbers, conference calls, growth projections, may I suggest Yahoo finance and do your own research and not base it on some guy posting on a tech board about gadgets. I am just bringing up a few reasons why the RIM stock might just be a bargain, but obviously no one knows the future for sure.

            Generally though buying stocks at 52 week highs tend to burn people. Buying them when they are down and nearing its 52 week lows, but nowhere near out is usually good time.

            Also, what is “astroturfing”, I wasn’t aware it was a past tense verb or what its slang use means?

          • You’re on the Internet, right? I suggest urbandictionary.com. Definition #2 certainly sounds like what you’ve been doing here.

          • Jth9234

            You have used that term as if its a real word. I know astroturf came from the artifical man made baseball field to simulate the look of grass where the Houston Astros used to play their home games. Using as a verb in the present tense? Sounds kind of ignorant and reppeated over and over in your responses to my posts doesn’t make you sound any more intellignet.

            Oh yea, what can I say, don’t buy RIM’s stock, its completely up to you. Just saying the upside and room for a move are all there…

          • Seriously? You’re talking up RIM stock primarily because of the possibility that Apple might screw up in the future, not because RIM might stop screwing up? And you expect a serious audience for that reasoning?

            “Astroturf” in its contemporary American colloquial meaning describes almost exactly what you’re doing.

          • Jth9234

            You don’t actively read well, huh? Where did I ever knock Apple as a company in my posts? Its perhaps the best run company out there currently from a business perspective. The stock price tends to reflect that, but it may have a little more room to the upside since its still only trading at less than 20x’s earnings and it is still a growth stock in the tech sector. But could be risky since it has had such a meteoric rise.

            I am not saying Apple will screw up, I am saying retaining 90%+ market share in any business is nearly impossible to maintain. I mean Windows based PC’s did manage to come close to that number for two decades consecutively, but I think this is a far different business model where pricing, features, and compatibility will be more similar in tablets than it was in Windows based PC’s vs. Linux vs. Macs.

            I am only talking up a buying opportunity towards a beaten down stock bc it is entering a new and growing business model where it could very well gain a significant market share.

            IF RIM continues to sell 10 million+ smartphones and cuts into a significant enough share of the tablet market, its current 8x earnings PE ratio is insanely cheap right now. Keep in mind, thats a bif “IF”, but very possible…

  • I’d like to know how much they’ve invested into the development of the Playbook and how many of them RIM’s going to have to sell to break-even.

  • existing users only make RIM money if they’re also paying license fees for BES. People holding on to blackberries, not buying new ones, not paying BES fees do nothing for RIM

    • Jth9234

      That would be true if they weren’t still selling 10-14 million blackberries a quarter though. Of course everyone can see in the American market that now that the iPhone is in two of the biggest 3 major carriers, Blackberry does have an uphill battle.

      But I think as long as they stick to what they do well, email/messaging with physical QWERTY keyboards, there will always be a market for those phones. Some people constantly text and reject the touchscreen only phones just bc of something so simple.

      If Apple designs an iPhone with a kick ass physical keyboard, you never know, that would really hurt RIM I think…

      • Sales don’t mean much, if they don’t manage to generate enough profits. Nokia is selling millions upon millions of phones every quarter and they’re barely afloat.

        • Player_16

          Smart phones, mangochutney, smart phones.

  • Dmitri

    Looks like amateur hour is back.