RIM production down, may miss Q4 targets

As we all know the transitional period that Research in Motion has been undergoing for over a year now has caused BlackBerry to lose significant market share--especially here in the US. According to Barrons.com, Q4 will again be disappointing for shareholders as they are predicting BlackBerry shipments will again be less than stellar.

However, here at OSBB we believe there is light at the end of the tunnel. With the upcoming launch of PlayBook OS 2.0 and BlackBerry 10 devices this year RIM will be poised to make a significant comeback in the US and abroad. Don't' give up #TeamBlackberry!

Full-text from Barron's.com:

Morgan Stanley’s Ehud Gelblum this morning reiterated an Equal Weight rating on shares of Research in Motion (RIMM) after slashing his estimates for the fiscal Q4 ending this month, writing that his sources indicate production of the BlackBerry fell dramatically last month, meaning the company may miss its shipment target for the quarter.

Checks from our colleagues in Asia indicate RIM’s supply chain orders slid 45% m/m in Jan and are expected to be flat in Feb, implying CQ1 units could be down 30% q/q as sell-through is weak. We have picked up mounting anecdotal evidence that RIM continues to lose momentum given its lack of major new phone launches until BB10 devices come out in “latter 2012,” while news flow indicates enterprises from Halliburton to U.S. agencies are adopting alternative devices.

Gelblum thinks that implies shipments of 9.6 million units, down from his prior forecast of 11.5 million units, and below the company forecast of 11 million to 12 million.

Gelblum cut this quarter’s estimate to $4.13 billion in revenue and 70 cents a share in net profit from a prior $4.72 billion and 87 cents. Consensus stands at $4.6 billion and 83 cents.

Gelblum gives the stock a “base case” price target of $15, down from a prior $18, a forward P/E of 5.5 times.

RIM shares today are up 47 cents, or 3%, at $15.04.

Original: Barrons.com

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