Research In Motion: Blackberry Bold Delay to Negatively Impact 2Q Guidance

An expected delay for the launch of Research In Motion Ltd.’s (RIMM) new BlackBerry Bold smartphone is expected to have a negative impact on the company’s second quarter guidance and may produce volatility for its shares. RIM is set to report first quarter results and provide guidance for the subsequent quarter after markets close on Wednesday.

AT&T (T) may launch the 3G BlackBerry Bold in the middle of August as it continues to stabilize the device on its High Speed Packet Access [HSPA] network, according to Mike Abramsky at RBC Capital Markets. This is two to three weeks later than the analyst previously estimated.

As a result, he has lowered his second quarter guidance estimates to a range of $2.5-$2.6-billion from $2.6-$2.7-billion in revenue and to $0.91-$0.94 from $0.94-$0.97 in earnings per share. However, RBC’s revenue outlook is still more than $100,000 above consensus.

Mr. Abramsky continues to expect company guidance for second quarter shipments will be above six million and subscriber additions of more than 2.4 million.

This development mirrors early stability issues RIM encountered with other networks, including a November 2005 delay for the BlackBerry 8700 with AT&T, which was resolved “to maintain its hallmark battery life user/experience,” the analyst told clients. He noted that the 3G phone has higher power consumption, and both a new operating system and processor.

Mr. Abramsky considers any price weakness in RIM shares that may result from news of a delay as a buying opportunity for long-term investors. He maintained an “outperform” rating on RIM and $165 price target.

Comments

[wallawallab...:]

Wannabes going to find it increasingly unprofitable to try to ape the iPhone's budding success story.

Whatever happened to innovation, outside of Apple?

2008 Jun 26 08:20 AM