RIM's Q1 report, forecast likely to be grim

Struggling BlackBerry maker due to release fiscal first-quarter earnings on Thursday

Nearly seven weeks ago, Research in Motion (NASDAQ: RIMM) issued a dramatically scaled-back sales and profit forecast for its fiscal first quarter, sending shares into a sharp tailspin.

Now, with the BlackBerry maker set to release Q1 earnings after the market closes on Thursday, there's no evidence that the company is poised to turn things around.

(Also see: RIM's share of U.S. smartphone market continues to dwindle)

In fact, recent surveys show RIM continues to lose smartphone market share in the U.S. -- primarily to devices running Google's Android OS -- while the company's rollout of its PlayBook tablet in April was plagued by critical reviews, tethering nonsense and reports of unimpressive sales. RIM also has been hit by a passel of analyst downgrades.

Shares of RIM finished trading Wednesday down 59 cents, or 1.65 percent, to 35.17. The stock is down 38 percent since the Canadian company's April 28 warning.

So what to expect on Thursday?

According to MarketWatch, consensus estimates call for Q1 earnings of $1.32 per share on revenue of $5.15 billion.

In its revised forecast from April, RIM said it expected profits of $1.30 to $1.37 a share, down from earlier company predictions of $1.47 to $1.55 a share. RIM also said Q1 revenue will be "slightly below the range of $5.2 billion to $5.6 billion" offered on March 24, during the company's most recent earnings conference.

The real question is whether RIM stands by its previous prediction of full-year earnings of $7.50 a share. RIM reaffirmed that figure on April 28, even as it essentially warned that Q1 was looming as a disaster.

That's because the company is pinning much of its hopes for a rebound on its BlackBerry 7 touchscreen smartphones, due out in the late summer. In its revised forecast, RIM wrote that its confidence in the previous full-year earnings forecast "reflects anticipated strong revenue growth in the third and fourth quarters of the fiscal year driven primarily by the launches of new BlackBerry smartphone products and prudent cost management."

Don't expect RIM to stick with that full-year forecast again or talk about "anticipated strong revenue growth." It would be wishful thinking. Consensus estimates already ballpark fiscal year earnings around $6.36 a share. I wouldn't be surprised if RIM on Thursday offers guidance below that. It's time to get real.

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