Research In Motion Earnings Preview

Wednesday, April 2, 2008

RIMM is expected to report Q4 results after the close today with the conf call following at 5 ET. Current Q4 consensus is for EPS of $0.70 on $1.86 bln in revs. Current Q1 consensus is for EPS of $0.76 on 2.02 bln in revs. Net subscriber additions is the important metric and street expectation is for an addition of ~2.16 mln. Expectations are for a very good qtr with net sub additions exceeding consensus and good Q1 guidance. A lot of the gossip surrounding the stock recently has had to do with the Blackberry 9000 or the "iPod killer" as some have dubbed it. It is currently scheduled to be released in August but initial reviews are that it is made to look like the iPod but that the functionality is worse. We would expect the co. to use the call as a forum to trumpet the positive things about the 9000 and generally try to quell the investor unrest surrounding the negative commentary. Other important issues on the call are: 1) How is end market demand holding up in the face of fears of a drop in consumer and enterprise spending. 2) International sales growth, particularly in Europe 3) Any discussion of the continued issue of the gap between units shipped and units activated. Recent Earnings Reports: RIMM has a long history of reporting at or slightly above EPS consensus which is basically what is expected this qtr. Recent Price Action: The stock is coming into their report at about the same price it gapped up to after their earnings report last qtr. It is up almost 50% off of its Jan lows around $80. Technical Levels of Interest (Note: Length of the horizontal lines correspond with the strength of the level)