(Reuters) - Research In Motion posted a 27 percent drop in quarterly profit on Thursday and said it would likely ship between 11 million and 12 million BlackBerry smartphones in the weeks around Christmas, the first decline in years for that historically strong period.
COLIN GILLIS, ANALYST, BGC PARTNERS, NEW YORK ON Q4 OUTLOOK:
It’s dismal. Their guide for Q4 is below expectations. The concern is there’s a number of phones in the channel already. Is this the start of a downward trend in terms of units shipped?(If) consumer demand slows for their product the stuff is going to sit there and we could start seeing the ratcheting down of units shipped and that’s the big concern.
“2012 is going to be a difficult year for the company. It’s too soon to say that there’s a bottom in place here. This is the risk of a stock like this is that numbers continue to get ratcheted down and it can happen very quickly, particularly if it falls out of favor.
ON NEW QNX PHONES SUMMER DELIVERY DATE: “By then the ecosystem runs the risk of being abandoned. They’ve already got tepid developer support and then they’re going to be rolling out these phones right smack in the (midst) of an iPhone 5 (launch) most likely.”
BARRY SCHWARTZ, PORTFOLIO MANAGER, BASKIN FINANCIAL SERVICES, TORONTO
“They need to shake it up and shake it up quickly . the transformation of RIM to becoming a software company is what’s in store for 2012 and we may see them completely get out of the handset business all together. Maybe it’s more worthwhile for them to have other people produce their products and sell it as a RIM phone, but obviously people are disappointed with what’s going on with the guidance.
“People are more emotional on this name than the value that’s in there. It’s been a terrible performer, it’s missed guidance, their guidance was not even close to what they were talking about in the beginning of the year so it’s being hurt for those reasons, it’s more of a backlash than based on value.
“RIM needs a jolt, a share buyback would help, a dividend would help, or a sale or a breakup would help but I think all the momentum players are now out of the stock. At some point there’s got to be more value than the price is reflecting.
“The guidance was exactly what I had in my model and the mention of somewhere around 75 million subscribers is actually pretty good, so the trend is the same as last quarter: they’re still adding a lot of subscribers, but they’re not selling enough phones.”
“The takeaway from that is customers aren’t churning from RIM to other platforms, they’re just not upgrading their BlackBerries.”
“That’s going to be the big question: are (customers) just going to wait and upgrade to the iPhone and Android or are they really that loyal where they’re going to wait for a better BlackBerry?”
“(On the stock decline) I can’t explain the market and I certainly can’t explain the market as it relates to RIM’s stock.”
“The trend is not good, but they’re not in a panic situation.”
JEFFREY FIDACARO, ANALYST, SUSQUEHANNA FINANCIAL, NEW YORK:
“The focus is going to be on the (fourth-quarter BlackBerry sales forecast of) 11-12 million units, down 18 percent sequentially. Normal seasonal fourth quarter is up 7-9 percent. I think that implies significant concerns on sell-through.”
Reporting by Cameron French; Editing by Frank McGurty