 |
Research In Motion's shares in retreatPosted by Retirement on: 2005-09-29 09:15:18 in category:
Stocks & Securities [ Print | Permalink / 0 Comment(s) ] Deutsche Bank cuts to sell as subscriber worries surface By Rex Crum, MarketWatch Last Update: 10:26 AM ET Sept. 29, 2005 SAN FRANCISCO (MarketWatch) -- Research In Motion Ltd. shares fell as much as 8% Thursday after the maker of the popular BlackBerry handheld wireless-communications device reported disappointing second-quarter subscriber additions. Research In Motion (RIMM: news, chart, profile) fell $5.95, or 7.7%, to $71.30 in recent trading after the company said wireless carriers added about 620,000 BlackBerry subscribers during the quarter ended Aug. 27. However, those numbers were at the low end of its previous forecast range of 620,000 to 650,000 new subscribers. The subscriber numbers dulled RIM's otherwise upbeat report, which included a 57% rise in second-quarter earnings. Deutsche Bank analyst Brian Modoff lowered his rating on Research In Motion to sell from hold in the wake of the news, and cut his price target to $60 from $65. Modoff cited signs of slowing growth for the move and said the company's subscriber growth projection was below expectations. In a reseach note, Modoff said there were "cautionary signs that the company's growth is slowing and may not be able to meet sizable market expectations for long-term growth." Increasing competition was also a concern. Modoff added that increasing competition was a concern, and that the "sheer number (of new products) will weigh on RIM's outlook, with pricing pressure across product and service lines." Latest results, outlook Research In Motion posted a profit of $111 million, or 56 cents a share, on revenue of $490 million for the August period. During the same period a year ago, RIM earned $70.6 million or 36 cents a share on $310 million in revenue. Excluding one-time items, Research In Motion earned $120 million, or 61 cents a share, in the quarter to meet Wall Street analysts' consensus estimates. The company also topped analysts' revenue forecast of $489 million. Including new subscribers added during the quarter, the company's total subscriber base expanded to 3.65 million. The report came just two days after rival Palm Inc. (PALM: news, chart, profile) and Microsoft Corp. (MSFT: news, chart, profile) said they would work together on a so-called Treo smart phone that features Internet access, as well as wireless connections to company files and other business applications. Palm and Microsoft executives say they are setting themselves up to take on the BlackBerry. Research In Motion, for its part, said this week it plans to work with Intel Corp. (INTC: news, chart, profile) to have the semiconductor giant produce chips for future devices. On a conference call, Chief Financial Officer Dennis Kavelman said Research In Motion should post a third-quarter profit, excluding one-time items, of 62 cents to 68 cents a share, on revenue in a range of $540 million to $570 million. Analysts have been looking for earnings of 66 cents a share on $548 million in revenue in the November quarter. The company expects between 680,000 and 710,000 new subscribers to be added in its third quarter. Looking further ahead, RIM forecast a fourth-quarter profit of between 74 cents and 81 cents a share on revenue in a range of $590 million to $620 million. Wall Street's current consensus estimate is for earnings of 71 cents a share on revenue of $548 million. Homepage Other community sites http://www.business-business.biz Please support our sponsors: To design your custom retirement plan. http://www.retirement-plan.us For planning IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management- Nationally ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
|
Post new CommentThis site does not allow anonymous comments. Registered members can login to participate. Registration is free and takes only a few seconds |
|