RIM shares drop on eve of Q2 earnings report

Bloomberg survey of analysts indicates (surprise!) poor PlayBook tablet sales

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Shares of Research in Motion (NASDAQ: RIMM) were down as much as 1.13, or 3.75%, in early trading Wednesday as investor optimism stemming from the recent debut of new BlackBerry smartphones fizzled on the eve of the Canadian company's fiscal 2012 second-quarter earnings results.

It's been a brutal year for RIM, which continues to lose smartphone market share, primarily to devices powered by Google's Android mobile OS, and which endured poor reviews of its BlackBerry PlayBook tablet released last spring.

RIM's stock hit a five-year low of 21.60 on Aug. 8, but then rebounded through the rest of the month amid hopes that its new smartphones would spur sales and help recover lost market share.

However, after reaching as high as 33.54 on Sept. 1, shares have struggled to hold onto those gains. Even with lowered expectations, poor numbers from Q2 will put even more downward pressure on the stock.

Indeed, the anticipation of a bad quarter may be affecting share price ahead of the earnings, along with a Bloomberg survey of analysts hinting at poor sales of the PlayBook:

[RIM], depending on its new PlayBook to bolster sales as demand for its BlackBerry phones withers, may have shipped just one of the tablet computers last quarter for every 19 iPads from Apple Inc.

The company, which reports earnings tomorrow, probably sold about 490,000 PlayBooks during the first full quarter of sales, according to a Bloomberg survey of analysts, compared with the 9.25 million iPads shipped last quarter. Analysts cut estimates for full-year PlayBook shipments, to an average of 2.2 million, according to the survey.

Of course, shipments don't necessarily translate into retail sales, as any Best Buy employee could tell you, so the revenue numbers from PlayBooks could be even worse. We should have a better idea after the market closes on Thursday.

The real question is how long RIM will stick with the PlayBook. Michael Walkley, an analyst at Canaccord Genuity Ltd., tells Bloomberg, "RIM hasn’t given up on the PlayBook, but it's clearly off to a poor start."

Given HP's abrupt exit from the tablet market in the face of abysmal sales, he probably should have added "yet" to that observation.

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