Wednesday, December 5, 2012

Research In Motion Limited (NASDAQ:RIMM): MKM Uplifts Estimates On BB10

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. 

No comments:

Post a Comment

Privacy Policy | Legal Disclaimer