Research In Motion Ltd. (RIMM) did what it had to do in its fiscal second-quarter with better-than-expected EPS and revenue, and, more importantly, a solid outlook for the fiscal third quarter.
Now the question is: did it do enough to win over analysts that had been rather down on the company heading into the report?
After the market closed on Thursday, the smartphone giant announced earnings per share of $1.46, which easily beat the Zacks Consensus Estimate at $1.35. With a year-over-year gain of 31%, revenue was also ahead of expectations at $4.62 billion, compared to $3.53 billion.
The quarter added about 3.4 million new BlackBerry subscriber accounts net, bringing the total subscriber account base to more than 50 million. It also shipped over 12 million BlackBerry smartphones in the fiscal second quarter.
That’s all fine and good, but analysts were really interested in the company’s outlook for the fiscal third quarter. Was Research In Motion going to be able to hang with the likes of Apple’s (AAPL) iPhone and Google (GOOG)?
The company expects earnings per share between $1.62 and $1.70 per share for the quarter, which is well above the Zacks Consensus Estimate of $1.40. It also sees revenues between $5.3 billion and $5.55 billion with net subscriber account additions of 5 million to 5.4 million.
RIMM said it expects a continuation of this momentum in the fiscal third quarter, as it extends the rollout of new products into additional markets, including the BlackBerry Torch.
The analysts’ response to this will be very interesting as they had not been the most optimistic bunch of late. In the past month, there had been 8 downward revisions and no upward revisions. Furthermore, the past 7 days saw 3 downward revisions and only 1 to the upside. There are 43 total estimates for the period.
Despite the pullback, the Zacks Consensus Estimate of $5.56 stayed steady over the past 2 months and remains about 2.6% better than 3 months ago.
The same trend was seen for next fiscal year, though, with 9 downward estimates in a month out of 36 total. There were also 3 downward revisions and an upward revision in the past week.
This time though, it did impact the Zacks Consensus Estimate of $5.87 per share, which is down 6 cents in the past week and off 7 cents from 3 months ago.
Research In Motion has been stuck with a Zacks #3 Rank (‘hold’) for a while with a longer-term “Neutral” recommendation. But if analysts like what they saw in this quarter, that could change very quickly. Whether or not this company can make up the 30% drop in its share price this year is another story.
Shares were up more than 7% after hours…
We’ll have a lot more on Research In Motion’s quarter coming up…
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