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Morgan Stanley(NYSE:MS), in a statement about Research In Motion Limited (NASDAQ:RIMM), upgraded its outlook on the consumer electronics company’s fourth quarter while still remaining pessimistic on the company’s performance. The analyst involved, Ehud Gelbum, revised upward most of his projections for the company’s annual report. He now expects to see an earning of around $0.82 per share and revenue of about $4.5 billion. This is still below the company’s own predictions which cites figures of $4.6-$4.9 billion revenue and an earning per share of $0.80-$0.85. Despite the more optimistic numbers the company is offering Gelbum’s outlook is still an upgrade from what had previously been expected of the company by Morgan Stanley.

In his detailed updated analysis Mr. Gelbum upgraded many of the key figure to reflect a better quarter for the Canadian mobile device manufacturer than many had though likely. Gross Margin is listed as coming in at around 40.2% up from 39% while handset units shipped is now expected to be 10.1 million rather than 9.6 million. This compares to the company’s third quarter where we see a gross margin of 37.2% and a sipped total of 14.1 million units.

The report finished with a dour outlook on the company’s future which suggested that poor results would continue and probably get worse. Grlbum said he expected the trend to continue into the first quarter of this year. One indication of the company’s poor performance was the release of Jabil Circuit Inc. (NYSE:JBL) results yesterday which showed a poor third quarter. That company manufactures RIM’s mobile devices.

Research In Motion has faced trouble since the advent of a new breed of smartphone dominated by the iOS and Android devices. The company has failed to recapture the market it once held among the business community where it once held a reputation for unparalleled reliability and security in its handsets. The company’s recent attempts to reinvigorate itself have not bee well received including the introduction of a tablet device, the Playbook, which operated on Blackberry’s own OS. Despite the poor results the company has been showing Prem Watsa has stood behind the company. He joined the board last January and promised to do his best to turn the company around in his shareholder’s letter. He also doubled his stake in the company in late January. His confidence may be misplaced in RIM