RIM earnings preview: Bleak, disappointing, 'terrible'

The mobile company is expected to post a net loss for the first fiscal quarter and could continue those troubles in the coming quarters.

RIM

It's no secret that Research In Motion is in deep trouble. But most analysts expect the company to only further prove that point later today.

After the market closes, RIM will announce its fiscal first-quarter earnings, which consensus among Wall Street analysts pegs at a net loss of 3 cents per share on $3.1 billion in revenue. During the same period last year, RIM posted a profit of $1.33 per share on nearly $5 billion in revenue.

As one might expect, the more bearish analysts out there have been chiming in on their expectations for RIM's earnings. In fact, Jefferies analyst Peter Misek told All Things Digital in an interview published today that the earnings announcement is "going to be terrible with a scoop of worse for August," seeming to indicate that RIM will be providing guidance for its next quarter that could look even more concerning to investors. Well, for those investors who are actually left, that is.

Over the last year, RIM has suffered through a fire sale, shaving off 68 percent of its stock value and watching its market capitalization fall to $4.8 billion yesterday. Since the beginning of this year alone, the company's shares are down 37 percent.

Those troubles, coupled with plummeting device sales and a seemingly confused management team, have prompted many to wonder if it's time for the company to sell. Recently, rumors surfaced saying RIM might try to unload its devices business to focus on services and leverage its intellectual property. However, Wedge Partners analyst Brian Blair said earlier this week that his company doesn't "believe that RIM has much to offer."

"Yes, the company has real intellectual property around email delivery, and they still do some things that companies like Apple can't (ever try to delete an email on an iPhone when not connected to the network?) but overall, their manufacturing capability isn't worth much in our view," he wrote in a research note.

Regardless, RIM must look to the future and decide once and for all how it can extricate itself from its current decline. Wedge analyst Brian Blair has an awfully dour view, however, on where he sees RIM heading in the coming year.

"RIM finds itself in such a situation with an aging product line and nothing that appears able to change its fate in the pipeline," Blair wrote recently in a note obtained by All Things Digital. "We see a steep drop off in revenues and units near term, punctuated by a drop in subscriber adds, and an OS refresh that is largely ignored by carriers and consumers alike, driving RIM into a forced sale in 2013."

 

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