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March 27, 2011

What Is Wrong with RIM ( Research in Motion)

After looking at Research In Motion's earnings and guidance, the market decided to run away from the company. The stock was slammed today, dropping 11% after co-CEO Jim Balsillie failed to impress on the company's earnings call.

Research In Motion shares are down 10% in after-hours trading after the company issued weaker-than-expected guidance for its May quarter.
RIM's revenue and EPS guidance are both below consensus, despite the expected launch of RIM's BlackBerry PlayBook tablet during the quarter.
In its press release, RIM notes that its guidance is "slightly wider than normal to reflect the risk of potential disruption in RIM's supply chain as a result of the recent earthquake in Japan."
For the February quarter, revenue, EPS, and device shipments were roughly in line, but below some of the higher Street estimates.  RIM no longer reports subscriber metrics.
Key Stats:
Revenue: $5.6 billion vs. $5.64 billion consensus
EPS: $1.78 vs. $1.76 consensus
Devices shipped: 14.9 million vs. 14.7 million consensus (via Morgan Stanley)
Guidance: $5.2-5.6 billion vs. $5.64 billion revenue consensus, $1.47-1.55 vs. $1.65 EPS consensus, 13.5-14.5 million devices vs. 14.7 million devices (consensus via Morgan Stanley)