Research in Motion Earnings Preview

Further downside could be ahead for Research in Motion if they can’t deliver a stellar quarter. Research in Motion is scheduled to report their fiscal first quarter 2011 results after the market closes on Thursday, June 24.


Last quarter, Research in Motion reported earnings results that were $.01 below Wall Street’s consensus estimates. RIMM shares plunged 7.4% as investors dumped the stock following the disappointing earnings results.


The current Wall Street consensus estimates are for revenues of $4.35 billion and EPS of $1.34. This would imply a 17% increase in revenues over last year’s $3.42 billion. And a 37% growth in earnings over the $.98 per share earned in the previous year.


In 2010, Research in Motion’s shares have fallen 9% and have underperformed the 2% gain in the Nasdaq. Last year, RIMM shares gained 66% and outperformed the 44% gain in the Nasdaq.


Research in Motion stock is currently trading at 10x consensus 2012 EPS estimates. Despite an attractive valuation, RIMM is losing market share to Apple and will likely report disappointing quarterly numbers once again.


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