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RIM's new chief to announce first earnings results

Tue, 03/27/2012 - 1:05pm
ROB GILLIES - Associated Press - Associated Press

The new chief executive of BlackBerry-maker Research in Motion will oversee his company's first earnings report after the market closes Thursday.

WHAT TO WATCH FOR: Details from CEO Thorsten Heins on a strategic direction for the company and whether RIM can keep selling older models while it prepares to launch a next-generation smartphone at the end of the year. Analysts say RIM's future depends on the new BlackBerry 10 software platform, although many say it may be too late.

Heins, formerly a little known chief operating officer who joined RIM four years ago from Siemens AG, replaced RIM's founders after the company lost tens of billions in market value.

Heins has said a drastic change in strategy is not needed, even as the once iconic maker of the BlackBerry smartphone confronts the most difficult period in its history. Following the departure of Jim Balsillie and Mike Lazaridis, who stepped down as co-CEOs and co-chairmen in January, Heins assumed the top job at a time when Americans were abandoning their Blackberry's for flashier touch-screen phones like Apple's iPhone and various competing models that run Google's Android software.

Peter Misek, an analyst at Jefferies & Co. in New York, said it will be a bad sign if RIM doesn't meet its guidance of 11 million to 12 million units shipped in the quarter.

"The key to RIM surviving is them continuing to add subscribers while they transition to the new operating system," Misek said.

Mike Walkley, an analyst with Canaccord Genuity, said RIM is in a tough spot with its product portfolio. Walkley said what the new CEO says about boosting sales of current models before BlackBerry 10 is released will be important. But Walkley said the new BlackBerry's will come out too late to reverse RIM's fortunes.

"Blackberry 10 could be a fantastic operating system, but will consumers even try it out and will app developers adopt it?" Walkley said.

WHY IT MATTERS: Just a few years ago the Canadian company was riding high when President Barack Obama refused to part with his BlackBerry after he took office. Although Blackberry's are cheaper than some of their rivals and remain popular internationally, RIM is struggling with delays in getting new phones out. In addition its PlayBook tablet computer has been a dud, and its stock price is at a five-year low. A company that was once worth more than $70 billion now has a market value of less than $8 billion.

WHAT'S EXPECTED: RIM has said it expects fourth-quarter earnings will be in the range of 80 to 95 cents per share on revenue of $4.6 billion to $4.9 billion. Analysts polled by FactSet on average expect profit of 81 cents per share on revenue of $4.54 billion.

For the current fiscal quarter ending in May, analysts expect $4.3 billion in revenue and earnings of 67 cents per share and earnings of $4.08 per share for the year.

LAST YEAR'S QUARTER: RIM earned $710 million, or $1.27 per share, on revenue of $4.08 billion.

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