Earnings Preview: Research in Motion

| About: BlackBerry Ltd. (BBRY)

Research In Motion (RIMM) is expected to report Q3 earnings after market close Thursday Dec. 18, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 83c for EPS and $2.82B for revenue, according to First Call.

Analyst Views

Much of the bad news is already out, as on Dec. 2 the company warned that both revenue and earnings for the third fiscal quarter would come in below analysts' projections. The company blamed a stronger U.S. dollar as well as the global economic slowdown, which has put a crimp in sales of wireless devices. RIM sees 81c to 83c, excluding one-time items, on sales of $2.75B to $2.78B.

However, eyes and ears will be focused on any guidance the company gives about business trends and estimates for Q4 and its outlook into FY10. Both BMO Capital Markets and Citi Investment Research expressed concern that estimates for the company going forward could be too high. While the smartphone business is still growing, the economy stinks, enterprise spending is slowing, and RIM faces increasing competition from the likes of Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).

Specifically, RBC analyst Mike Abramsky thinks RIM will guide to $2.9B to $3.0B of revenue and 80c to 83c EPS, below the Street's consensus of $3.0B and 83c. He also expects RIM to guide to 2.6M to 2.8M new subscribers, 0% to 8% sequential growth, and 7.1M to 7.4M smartphone shipments.

Key issues for the conference call include forward guidance; commentary on "Storm" customer returns; details on the pipeline going forward; commentary on their consumer spending outlook and competitive landscape.