RIM: Ahead of Earnings Estimates Creep Up

| About: BlackBerry Ltd. (BBRY)

The Street is moving up estimates and price targets for Research In Motion (RIMM) ahead of the company’s Thursday afternoon earnings report for its fiscal first quarter ended May. The current consensus is for revenue of $3.42 billion and profit of 94 cents a share, but the numbers have been creeping higher. As expectations grow, the stock continues to rise; the stock has more than doubled since mid-March.

The company’s guidance was for revenue of $3.3 billion to $3.5 billion, gross margin of 43%-44%, and 3.7 million to 3.9 million in net new subscriber adds.

Here’s a look at some of this morning’s thought on the quarter as we head into the report:

  • James Faucette, Pacific Crest: Tuesday morning, he lifted his EPS estimate for the February 2010 fiscal year to $3.79, from $3.40, with revenue going to $15.1 billion from $14.5 billion. He now sees subscriber net adds of 16 million for the year, up from 15.2 million, with device sales of 18.3 million, up from 17.3 million. He says sell-through in the May quarter was better than expected, driven by heavy promotional activity at Verizon and market-share gains in Western Europe. That said, he maintains a Sector Perform rating on the shares, noting that sell-through rates at AT&T and T-Mobile have “stagnated,” and that new handsets from other providers could put ASP, margin and share pressure on the company.
  • Kulbinder Garcha, Credit Suisse: He boosted his FY 2010 EPS estimate to $4.15 from $4.07; for 2011 he goes to $4.86, from $4.69. He remains Neutral on the stock, but upped his price target to $76, from $61. “While we acknowledge solid near-term trends, we remain concerned with respect to comeptitive dynamics” in the second half of calendar 2009.
  • Mike Abramsky, RBC Capital: Abramsky Tuesday repeated his Outperform rating, and raised his price target to $100, from $90. He lifted his FY 2010 EPS estimate to $4.11, from $4.02. For FY 2011, he goes to $5.14, from $5.12. The analyst writes that the company will have “an unprecedented” product line up in the second half of the calendar year.
  • Vivek Arya, Bank of America/Merrill Lynch: He repeated his Buy rating and $100 target Tuesday morning, asserting that check find the company could positively surprise with earnings Thursday, with continued market share gains and channel restocking partially offset by ASP pressure due to price promotions. “We like the stock heading into strong year-end portfolio refresh and enterprise upgrade cycle in 2010,” he writes. “Valuation is compelling.”
  • Matthew Hoffman, Cowen: Hoffman maintains his Neutral rating, but expects results to be at the high end of the forecast range. But he is concerned about the weak U.S. economy, and writes that he would prefer to look at companies with more emerging markets exposure. His estimates remain $3.50 for FY 2010 and $3.32 for FY 2011.
  • Matthew Thornton, Avian Research: He repeats his Positive rating on the stock, and lifts his price target to $92, from $81.50. For the quarter, he now sees $3.45 billion and 96 cents a share, up from $3.38 billion and 92 cents; he sees EPS of $4.10 for FY 2010, and $4.85 for FY 2011.

RIMM Tuesday is up $1.37, or 1.7%, to $81.75.

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