Research in Motion co-CEO Jim Balsillie said yesterday in RIM’s Q2 investors conference call that RIM’s fiscal year 09 is proving to be extraordinary. I wonder if he would say the same thing after RIM’s more the 20% plunge in after-hours trading last night.
This chart doesn’t show the 20% drop in after-hours trading so we will update it with one that looks much more bleak at market open…
UPDATE…
Now RIMM is down almost 25%.
RIM will see more of this no doubt now that the iPhone and Google phone are in play. Suddenly BlackBerry service is not what it once was. The market has moved on with more advanced devices.
CBlackberryNY, Thats a pretty ignorant post there. A stock doesn’t drop 25% in a 12 hour span because there is new competition in the marketplace. The iphone has been around for a while now and the google phone is brand new. A loss of market share from competition happens over the course of many months or years, not hours.
The heavy drop is due to the market place these days. Any bad news is going to hit a company hard. Normally I’d say it’s a good buy right now, but these days who the hell knows. Shorts have been banned, so the true market reaction isn’t even absorbed yet. I’m not sure how the balance sheet works, but all the cash spent on the new products that has lowered the margin on the devices sold hit last quarter…but when do the ‘sales’ hit? The past quarter or the upcoming quarter(?), which would make sense since the biggest consumer, the US, hasn’t been exposed to the new models yet.
Interesting times ahead…
As for CBlackberryNY, you’re off. Sorry, but I don’t think you’re tuned in to either the wireless market or the stock market.
I agree with bhs: this drop is more reflective of the general market conditions than any particular weakness with RIM.
Now RIM did warn that sales may slow down going forward, but again, that is a natural outcome of the economic stress.
RIM doesn’t suck, the economy does.
revs up 88% to $2.5B, earnings up 63% to $500 mln, subs up from 2.2 to 2.6 mln, service revs at $340 million. next quarter they guide to 2.9 mln subs, revs to $3B (up 20% vs up 13% in last quarter), and 7 mln devices (vs 6.1 this quarter, and 5.4 the quarter before). If these trends continue in any way, the stock will take care of itself. And despite the “bad” guidance, next quarter they’ll still earn well over $500 mln (up 78% from year ago quarter).
All the analysts completely are ignoring or just don’t believe Jim when he says they are investing today for something much larger ahead and is willing to give up short term earnings for adoption and scale. This is smart if it works and the stock will take care of itself. I’m surprised all the analysts were shocked by lower margin guidance. Jim explicitly telegraphed this on the prior quarter’s earnings call. And it makes perfect sense that they are competing on price (flip?) and also bringing the touchscreen, javelin, storm etc. All of the sudden they have basically 4 new manufacturing platforms they must perfect and it will take some time to fine tune it. As this happens the costs will come down.
Just watch the top line, new subs, and device sales numbers. As long as the continue to trend similarly, this company will increase significantly in value.
revs up 88% to $2.5B, earnings up 63% to $500 mln, subs up from 2.2 to 2.6 mln, service revs at $340 million. next quarter they guide to 2.9 mln subs, revs to $3B (up 20% vs up 13% in last quarter), and 7 mln devices (vs 6.1 this quarter, and 5.4 the quarter before). If these trends continue in any way, the stock will take care of itself. And despite the “bad” guidance, next quarter they’ll still earn well over $500 mln (up 78% from year ago quarter).
All the analysts completely are ignoring or just don’t believe Jim when he says they are investing today for something much larger ahead and is willing to give up short term earnings for adoption and scale. This is smart if it works and the stock will take care of itself. I’m surprised all the analysts were shocked by lower margin guidance. Jim explicitly telegraphed this on the prior quarter’s earnings call. And it makes perfect sense that they are competing on price and also bringing the touchscreen, javelin, storm, flip, etc. All of the sudden they have basically 4 new manufacturing platforms they must perfect and it will take some time to fine tune it. As this happens the costs will come down.
Just watch the top line, new subs, and device sales numbers. As long as the continue to trend similarly, this company will increase significantly in value.
Can not count rimm out. They own the marketshare, aapl is not moving in yet, they are making small advancements – that’s it. Big business and gov agencies run BB period.
Buy the stock while its on sale – in 2 years it will be up 75%.