RIM’s Earnings Could Wipe Stock Rebound on Blackberry 10 Enthusiasm

RIM’s Earnings Could Wipe Stock Rebound on Blackberry 10 Enthusiasm
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Research In Motion Limited (NASDAQ:RIMM)’s stock price rebounded by 5.6 percent, to $6.97 per share during the midday trading on Wednesday, following the announcement of the company that the Blackberry 10 will definitely go on sale early next year. RIM also announced its high expectations on the subscriber numbers for its new smartphone platform.
RIM’s Earnings Could Wipe Stock Rebound on Blackberry 10 Enthusiasm

In addition, Research In Motion Limited (NASDAQ:RIMM) CEO Thorsten Heins highlighted the new features of the Blackberry 10, during the company’s BlackBerry Jam developer conference in San Jose, California on Tuesday. Some of the features include the BlackBerry Flow, which enable consumers to use their devices one-handed, and the BlackBerry Hub, which contains all e-mails or text messages from a user’s accounts in different social media sites.

The “peek functionality” of the Blackberry 10, which allows users to navigate to the important features of the phone without exiting a running application impressed analysts. The participants during the conference, analysts, and developers alike were optimistic on the innovations of Research In Motion Limited (NASDAQ:RIMM) to the Blackberry 10. The enthusiasm reflected on the company’s stock, which soared to $7.21 per share, as of 9:31 AM  EDT on Thursday.

Some analyst projected that RIM’s earning report today could possibly wipe out investors’ enthusiasm on the Blackberry 10 and bring the stock price down. As of 2:38 PM EDT, shares of RIM were down by 2.68 percent to $6.80 per share. This indicates the investors are wary, due to the low expectations on the company earnings report.

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In a recent note to investors, Scott Sutherland, an analyst at Wedbush wrote, “We remain cautious on RIM, and expect FQ2 results to be below expectations, and we expect reduced guidance. While we see some value in RIM, given the lack of content and device ecosystems, we believe RIM’s integrated strategy will continue to face significant challenges.”

Forbes expects RIM ‘s revenue to decrease by $2.8 billion, and a net loss of $518 million. The report said the company is on a “spiral death.” A related report from Forbes cited that RIM plans to conserve its remaining cash until the launching of the Blackberry 10, and to cut 5,000 jobs to improve its operational efficiency, and implement its CORE program to save at least $1 billion by the end of fiscal 2013. RIM’s Blackberry 10 would face stronger competition from the iPhone 5, Android and Windows Phone 8 smartphones.

Forbes believed that Research In Motion Limited (NASDAQ:RIMM) is doing the right thing focusing on Blackberry services, such as the push-e-mail and BBM, which are unique value propositions for its customers. Analysts and investors expect Research In Motion Limited (NASDAQ:RIMM) to announce alternative strategies to boost assets and increase shareholders value during its earnings conference call today.

Last month, Peter Misek, analyst from Jefferies & Company claimed that the Blackberry 1o is not enough to save the company, despite its major improvements. He also speculated that Samsung Electronics Co Ltd. (LON:BC94) might buy the company.

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