Yesterday, Thorsten Heins had the displeasure of announcing yet another mediocre quarter for the beleaguered Research In Motion. Key numbers like revenue, smartphone shipments, and subscriber additions fell below Street expectations, leaving investors with a sour taste in their mouths.
RIM also lost a CTO, a COO, and a director—the latter being Jim Balsillie, a 20-year veteran of the company, and another being a 13-year veteran. And all Thorsten could say was, “the business challenges we face over the next several quarters are significant.” No doubt.
The only thing that kept RIM’s sunken stock from tumbling even low was the vague hinting that a “partnership” with another company would be possible, and that RIM hasn’t ruled out being acquired. But given that even RIM acknowledges it “expects continued pressure on revenue and earnings throughout fiscal 2013,” citing factors such as “ongoing weakness in the company’s U.S. smartphone business [and] increasing competitive pressure in the company’s international markets,” the hole dug is deep—and not many investors seem willing to drop ropes down.
Analysts appear no different. Following the report, the mood from them was cautious, prudent, heedful. JPMorgan analyst Rod Hall praised in a resarch note the fact that “BlackBerry 10 remains on track,” but also grimly stated that “the smartphone operating system war is over—and RIM is one of the losers.” Overall, he reduced his targets for RIM.
Canaccord Genuity analyst T. Michael Walkley also trimmed his forecasts, pointing to “increasing competition across all of RIM’s products.” Echoing Rod, he said RIM’s next-gen BB10 devices “will launch into an even more competitive smartphone market.”
National Bank Financial analyst Kris Thompson is no more optimistic. He believes the stock, currently hovering around $14, will drop to $8 per share. (It was $140 in 2008.) “RIM is in recovery mode; there can be no assurance that the company can recover,” he said.
And RBC Capital markets analyst Mike Abramsky suggests RIM has “lost too much momentum to recover.” He, as well, cut his price target for RIM stock.