JP Morgan Cuts Estimates on RIM - Again

J.P. Morgan has again trimmed its estimates on Research In Motion Ltd. (RIMM) in response to the BlackBerry-maker’s third quarter profit warning and signs of a broadening global slowdown in mobile handset sales. However, analyst Paul Coster is maintaining an “overweight” rating and told clients that RIM deserves to trade at a premium multiple as a result of its leadership position in an open-ended growth market.

Based on RIM’s Dec. 3 profit warning, the analyst cut his fiscal third quarter estimates to align with the revised guidance. He now looks for the company to report earnings per share of $0.81 on sales of $2.75-billion. Mr. Coster is also forecasting unit sales of roughly 6.8 million in the quarter, average selling prices of $332 and net subscriber additions of approximately 2.6 million. He is not yet factoring in the potential acquisition of Certicom Corp. (CERTF.PK).

J.P. Morgan’s estimates for fiscal 2009 through 2011 were also cut, with year-over-year unit growth in 2010 reduced from 42.7% to 32.5%. This implies unit shipments of about 37.7 million next year.

RIM reports third quarter results after markets close on Dec. 18.

Comments

[Panzera:]

Its a good thing they have geniuses like this guy working in the industry. I love how they use the manipulation theme for the title of the article. If every company did what RIMM did (posting what the earnings range will be) they could eliminate tons of useless jobs on Wall Street and actually avoid alot of manipulation in the market.

2008 Dec 08 12:36 PM