Research In Motion
There's little hope of the smartphone pioneer orchestrating a turnaround in the near term. Analysts see the BlackBerry maker posting a beefy deficit of $0.47 a share on a brutal 40% plunge in revenue.
Don't assume that Wall Street's simply being overly pessimistic. If anything, analysts have been too generous in the past. RIM has come up short in three of the past four quarters, including posting a much larger loss than what the pros were targeting three months ago.
Earlier this year there was buzz building around RIM as a buyout candidate, but now it seems as if nobody wants to try to catch a falling knife. They see how badly things worked out for the buyer of Palm, and nobody wants to repeat the mistake of buying an operating system on the way out.
Just three months ago, analysts were banking on a profit of $0.45 a share out of RIM this fiscal year, growing to $0.58 a share in the new fiscal year that begins next March. Reality crushed the prognosticators. Now, all 45 of the major analysts following RIM see a loss this fiscal year. The consensus estimate also calls for another deficit next year.
It doesn't take a genius to figure out the problem. Apple's
There's still money to be made with a shrinking slice of a growing pie, but RIM is shrinking too quickly. Apple and Google are too powerful, and now you have Microsoft
Value investors may not see it that way. They see that RIM has been trading in the single digits since June. Isn't this the same company that at least one analyst thought Microsoft would buy out if it fell below $50?
Forget about the buyout promise from a few years ago. Set aside the forecasts of near-term profitability that died three months ago. RIM's in trouble, and the only thing left to decide is the magnitude of the ugliness that next Thursday afternoon's quarterly report will provide.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares of any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.