Research In Motion Limited (NASDAQ: RIMM), the maker of BlackBerry smartphones, will announce its second-quarter financial results on September 16, 2010. Research In Motion has been facing a lot of problems concerning some of its BlackBerry services. The company is facing pressure from authorities in India, United Arab Emirates and Saudi Arabia to allow them access to encrypted messages sent over the BlackBerry smartphone.
In a recent research report, Simona Jankowski, an analyst at Goldman Sachs, maintained a Sell rating on Research In Motion and lowered the price target for the Research In Motion stock from $50 to $45. In her report, Jankowski said that according to recent IT spending survey, 54% respondents plan to increase their BlackBerry subscriber base over the next six months, compared with 71% in October 2009.
Meanwhile, Pablo Perez-Fernandez, an analyst at MKM Partners has a Buy rating on Research In Motion Perez-Fernandez said he believes that investor focus on the company’s position in the U.S. is misplaced. He also said in his research report that sales of BlackBerry in the quarter ended August have been higher-than-expected in Latin America, Europe and Asia. However, Perez-Fernandez lowered his revenue forecast for FY11 from $19.7 billion to $19 million. He also lowered FY11 EPS estimates from $5.82 to $5.72. However, this is still higher than the consensus forecast of $18.7 billion in revenue and $5.55 in EPS. Perez-Fernandez also lowered the price target for the Research In Motion stock from $75 to $69.
Research In Motion continues to face completion from other smartphone makers in North America. Also, the recent controversy in India and the Gulf is a cause of concern for the company. It will be interesting to see how much these factors affected the company’s second-quarter financial results. JMP Securities analyst Alex Gauna expects the company to report second-quarter EPS of $1.35, which is lower than his prior projection of $1.37.
In the last one month, the Research In Motion stock is down 16.97%, primarily due to the controversy surrounding some of BlackBerry’s services. Year-to-date, the stock is down 34.29%, underperforming the broader market. The stock is currently trading below its 50-day and 200-day moving averages. The stock has a 52-week range of $42.53-$88.08. It has a support level at $43.77 and a resistance level at $45.88.
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