Research in Motion Heading to Guidance Low End, Says Analyst

Sterne Agee analyst Shaw Wu has cut his estimates on Research In Motion (NASDAQ:RIMM) with predictions that the Canadian wireless manufacturer’s February quarter results will hit the bottom of its own guidance range, Forbes reported.

In a research note, Wu wrote, “Recently, we’ve been asked by investors our take on RIMM’s quarter and whether its competitive position has improved. Our supply chain feedback is that BlackBerry continues to lose momentum to iOS and Android while Windows Phone appears to be gaining some traction.”

According to Wu, the company’s higher-end BlackBerry phones, like the Bold 9900 and the Torch 9800 “are doing relatively better,” but demand is not so strong for other models. He believes the company will come in at the low end of its $4.6 billion to $4.9 billion revenue range and 80-95 cents EPS range. Wu lowered his shipment outlook for the quarter to 11.3 million from 11.9 million, cut revenue to $4.55 billion from $4.7 billion and edged profits up to 96 cents from 95 cents.

Looking to the February 2012 fiscal year, Wu foresees revenue of $18.8 million and profits of $4.25 a share, down from $19 billion and $4.35. For 2013, he forecasts $17.9 billion and $3 a share, down from $19.5 billion and $3.70.

Wu is keeping a rating of Neutral on the shares. “While we believe RIMM’s valuation is depressed … we continue to be concerned with its fundamentals where the company faces major product transitions with its new BlackBerry 10 OS late this year. In addition, we remain concerned with the competitive environment as AAPL (NASDAQ:AAPL) gets more aggressive and GOOG (NASDAQ:GOOG) Android continues to grow.”

Here’s how RIMM shares closed the day:

Research In Motion Limited (NASDAQ:RIMM): RIMM shares recently traded at $14.50, up $0.08, or 0.55%. They have traded in a 52-week range of $18.02 to $68.81. Volume today was 9,916,573 shares versus a 3-month average volume of 23,307,300 shares. The company’s trailing P/E is 3.41, while trailing earnings are $4.25 per share.

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