Michael Genovese of MKM
Partners maintained its Neutral rating on Research In Motion Limited
(USA)(NASDAQ:RIMM) and set a price target approximation of $11. He has written
that in spite of his estimates to look forward to the upcoming BB10 operating
system update to the BlackBerry, he sees meager chance of RIM returning to
profitability by the year 2014.
He left his estimate
intact for this quarter at $2.76 billion in revenue and a net loss of 32% each
share. Genovese increased his estimate for the fourth quarter that completes in
February to $3.07 billion and net loss of 22 cents.
30th January
is the date for commercial unveiling of the BB10. That is why Genovese expects that
8.3 million BlackBerrys will be shipped in the quarter, versus an initial 7.7
million prediction. He also feels that the quarter will see an increase in
average selling prices to probably $239 from his initial projection of $232.
For the fiscal year of
2014, Genovese projects $12.61 billion and a net loss of 28 cents.
He thinks that RIM not
reaching profit at this rate may imply some latest upgrades have exceeded their
optimism.
MKM argues that the
expected disinclination among channel partners will receive inspiration from the
fact that RIM has shed off sound share in both developed and developing
enterprise and consumer markets. MKM feels that RIM will execute a restricted
launch in an effort to turn away from heavy discounting and revenue rehearsals.
MKM also feels that RIM may want to falsify the impression of scarcity or
success that essentially translates to premeditated low sales to develop the
illusion that customers are purchasing at a frantic speed.
MKM also thinks that
RIM will probably ship an estimated 33.6 million BB10 units in FY14, shooting
up the estimate from 30.3 million.
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