Thursday night, smartphone maker Research In Motion (NASDAQ:RIMM) is set to report earnings for the second quarter of fiscal 2007. Put down your BlackBerry for a second and get the lowdown on its chances for a good quarter. That is, unless you're reading this on your BlackBerry. In that case, carry on.

What analysts say:

  • Buy, sell, or waffle? Thirty-seven analysts follow this market darling. Eighteen of them have a buy rating on the stock, while three are selling and the other 16 are content to hold. Research In Motion is also a heavily followed stock in Motley Fool CAPS, with 630 ratings -- and a lowly single star to show for it all.
  • Revenues. The average analyst is hoping for sales in the neighborhood of $816 million, up 45.5% over the year-ago period.
  • Earnings. EPS of $0.94 would satisfy Wall Street; earnings were $0.71 last year.

What management says:
In the latest earnings call, Co-CEO and Chairman James Balsillie noted that mobile service carriers have begun to wrap BlackBerries in a variety of new pricing plans, recognizing the market power of the product and brand. "We are beginning to see carriers reduce end-user service pricing for BlackBerry, recognizing the profitability and ARPU benefits of BlackBerry versus other data offerings. We are pleased to see these new plans, and we believe lower end-user pricing is key to stimulating demand and expanding the market." More on the consumer-level prospects in a minute.

What management does:
Gross margins are stable enough, though fixed costs are rising faster than revenues, putting a mild squeeze on operating and net profits. One hallmark of a rocketing growth stock is a steadily increasing return on equity, and Research In Motion is playing that role rather well, save for a hiccup two quarters ago. It looks like the analysts expect both revenue and earnings growth to accelerate compared with recent trends.

Margins %

May-05

Sep-05

Nov-05

Mar-06

Jun-06

Sep-06

Gross

54.2%

55.1%

55.8%

55.2%

55.2%

55.4%

Operating

30.6%

31.2%

31.6%

30.1%

28.9%

28.0%

Net

19.0%

19.3%

18.9%

18.5%

17.0%

17.1%



Efficiency Ratios

May-05

Sep-05

Nov-05

Mar-06

Jun-06

Sep-06

ROA

12.2%

13.1%

14.6%

15.8%

15.4%

15.4%

ROE

14.9%

16.1%

18.2%

19.2%

17.8%

18.9%

YOY Rev. Growth

102.0%

81.6%

65.1%

53.0%

45.0%

39.6%

YOY Earnings Growth*

153.0%

80.7%

40.3%

79.1%

30.4%

23.4%

*Earnings from continuing operations
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Indeed, the analysts are looking for better results than usual. Research In Motion launched a couple of spiffy new products early in the quarter, and it looks like sales are brisk. The new Pearl handset is making inroads in the consumer market, opening up entirely new revenue channels for the company, which traditionally sells to the corporate world. We shall see tomorrow night just how good the sales turn out. Given the recent bevy of warnings from other cell-phone makers and their chipset suppliers, Research In Motion would buck a strongly negative industry trend with a decent earnings report.

Competitors:

  • Microsoft (NASDAQ:MSFT)
  • Motorola (NYSE:MOT)
  • Hewlett-Packard (NYSE:HPQ)
  • Sony (NYSE:SNE)
  • Nokia (NYSE:NOK)
  • Palm (NASDAQ:PALM)

Microsoft is a Motley Fool Inside Value pick and Palm is a Stock Advisor recommendation. We're handing out free 30-day trials to all of our newsletters -- get 'em while they're hot!

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdingsif you like, and Foolishdisclosureis more addictive than a CrackBerry. In a good way.