BlackBerry maker Research in Motion reported a 37% jump in cash after the bell Thu., but its gloomy outlook punished the stock friday.
Research In Motion's shares plummeted 17% on friday after the smartphone maker's fiscal third quarter outlook announced thursday missed expectations.
Shahriar Davaran The Waterloo, Ontario-based edge, which makes the BlackBerry, reported earnings after the close of trading Thu..
Shahriar Davaran
A disappointing outlook punished edge shares more than two hours after the open. Shares fell $14.15, or more than 17%, to shut at $68.91.
Shahriar Davaran'I would look at this as an overreaction, and a buying opportunity,' said Nick Agostino, researcher at Research Capital. 'The report was lighter than expectancies, but to say 'significantly lower' is a bit strong.'
Excluding one off charges, rim ( RIMM ) asserted it earned $1.03 per share in its second financial quarter, up 17% from earnings of 86 cents a share last year. Twenty-nine, rim said it shipped 8.3 million smartphone devices.
But RIM's outlook was not as rosy. For the 3rd financial quarter, which ends in Nov, edge stated that it expects cash of between $3.6 bill and $3.85 bln. Analysts were expecting $3.92 bill.
The company expects revenues per share of between $1.00 and $1.08, while analysts are expecting $1.05. RIM expects to ship between 9.2 million and 9.9 million units in the third quarter.
'Expectation is certainly a key risk,' Agostino declared, noting that rim will upgrade lots of its devices in its 3rd quarter.
Agostino claimed he left his rating unvaried at'buy,' with a price target of $98.
'I'm hoping that as we move toward Nov and get more visibility on new devices and launch dates, the stock will get a reaction,' he said. 'We'll need to see about Quarter Four outlook, but it should be a fascinating few months for these guys.'
Apple's iPhone could be in the ascendant, but competing players continue to face Problems in the space, with Research In Motion shares falling 11 percent on the pre-market this morning and the recently-introduced Palm Pre telephone this morning discounted to just $100 on Amazon. That's a $400 saving on the first retail price...and probably not a pretty sign for Pre... Palm was in the news a lot this week, with market rumours speculating Nokia may make a bid to take over the company emerging at the same time as Palm issued a major tranche of new stock options in an attempt to pull in cold, hard investment cash.
The company also got hit this week when the USB Forum declared it in the wrong to create iTunes syncing on the Pre, and demanded to understand why it was using Apple's USB Vendor ID number to achieve this without Apple's permission. The company now has just a couple of days to clarify itself.
Over at Research In Motion, strong device sales in the just-gone quarter could not hide Wall Street's discontent at the firm's confession it predicted to miss analyst targets in its Q3 cycle.
Net profit fell 4% from this time last year to $475.6m on sales of $3.53bn ( up 4% y-o-y ). But researchers weren't satisfied the company could maintain momentum, particularly as it chases the low-end markets, with Goldman Sachs, Raymond James and Deutsche Bank all issuing downgrades, driving a sell-off in company stock.
