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Research In Motion Limited (RIMM) |
HenryTo
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 Posted: Sat Jun 26, 2010 9:15 pm Post subject: Research In Motion Limited (RIMM) |
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Morningstar's earnings notes on RIMM:
| Quote: | | After reviewing Research in Motion's RIMM first-quarter results, we are keeping our fair value estimate unchanged. Although shipments looked a little light (a fact that management attributed to new product delays), growth was still very respectable at 25%, and gross margins held steady at 44% on a year-over-year basis. Operating expenses were held in check, so the company also saw a strong increase in operating margins. We think the beating being taken by the shares today is based less on actual first-quarter results and management's second-quarter projections, and more on a growing realization among investors that the iPhone and Android platforms are a growing threat to RIM's customer base. Our view has been that iPhone and Android remain more consumer-centric pl atforms than the BlackBerry, and we're seeing growing evidence that the iPhone is starting to gain some traction in the corporate market. While we still believe that the BlackBerry remains the best overall communications device (e-mail, SMS, and voice), we think the BlackBerry platform remains a distant third to the iPhone and high-end Android phones when it comes to applications and media, two areas that we think are of growing importance to the consumer market. |
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HenryTo
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| Posted: Thu May 05, 2011 1:41 am Post subject: |
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Morningstar's latest comments on RIMM:
| Quote: | | Just over one month after reporting its fiscal fourth quarter, Research in Motion RIMM warned that first-quarter revenue and earnings are going to miss the expectations that management discussed during the last conference call. We are leaving our fair value estimate unchanged, as our expectations for the full year are below management's current guidance. The Thursday release comes just days before RIM's annual BlackBerry World event, and while the timing of the announcement is unfortunate, we think management did the right thing by getting the bad news out there. Given that management is basing its full-year expectations on the launch of new BlackBerry devices later in the year, it will be especially interesting to see what the firm announces next week. If we are as impressed by the new product lineup as co-CEO Jim Balsillie suggests that we will be, we'll reconsider our full-year view. We've been bearish on RIM's prospects for some time now, and while it is far too early for us to declare vindication, we do think the earnings warning fits with our thesis. RIM is selling fewer BlackBerry devices than it expected, and the ones that it does sell are at the lower-priced part of the product line. We think that at the high end of the smartphone market, RIM doesn't yet have a product that is competitive with the iPhone or the high-end Droid handsets from Motorola MMI. Additionally, the BlackBerry OS lags far behind Android and iOS in the availability of third-party applications. With that perspective in mind, we think it makes perfect sense that RIM's sales are suffering and that most of the weakness is at the higher end of the product line. Consumers who want a n ext-generation smartphone experience are probably flocking to iOS and Android, while consumers who want a reliable no-frills communication device are still buying BlackBerry devices. Although we are skeptical about RIM's high-end efforts, we believe that for e-mail and voice communication, BlackBerry still leads. The next couple of quarters (and even the upcoming week) should be very interesting for RIM. During the evening call, Balsillie admitted that RIM's high-end handsets are aging and that the company is in the middle of a transition. But he promised to deliver the moon in the next iteration of BlackBerry OS (RIM is jumping directly from 6.0 to 7) and the devices that will run on it. He also expressed confidence that analysts would be delighted with and heartened by what they'd see at BlackBerry World next week. |
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HenryTo
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| Posted: Fri Dec 17, 2010 2:54 pm Post subject: |
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Morningstar on RIMM's 3Q results:
| Quote: | | Research in Motion's RIMM third-quarter results were better than we expected, but we still hold the view that increasing competition from Android (and perhaps Apple AAPL, if Verizon iPhone rumors are right this time) is going to eventually put a crimp in RIM's revenue growth, margins, or both. We think RIM's current valuation reflects assumptions that the company has the same competitive position it had two or three years ago; because we disagree with this view, we would stay away from the shares. That aside, RIM had a very strong quarter. Revenue growth came in at 40% year over year, and we think it is on track to hit the low 30s for the full year, well above our current 26% estimate. Gr oss margins expanded to 43.6% from 42.7% in the year-ago quarter thanks to a product mix that leaned toward higher-end BlackBerry models, but based on management's projections for the fourth quarter, they are likely to fall below our estimate. As a result of higher revenue growth but lower gross margins, we expect gross margin dollars to come in about 4% above our full-year estimate of $8.4 billion. Another data point we watch closely (and which RIM will discontinue reporting in 2011) is average selling prices. In the third quarter, ASPs rebounded sequentially to $315 from $304, but we think the long-term trend is for further deterioration. Operating expenses increased year over year, driven by higher research and development expenses as well as higher selling, general, and administrative expenses. This has been the case for the first three quarters of the current fiscal year, and while we think growth in these line items is slowing, we expect SG&A to gradually grow as a per centage of sales as a result of higher marketing expenses necessitated by increased competition. |
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HenryTo
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Location: Los Angeles, California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11742
Location: Los Angeles, California
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