RIM Earnings Preview: Have BlackBerry Margins Bottomed?

BlackBerry maker Research In Motion (RIMM) already gave investors a peek into their holiday sales: They said subscriber growth was strong but profits and gross margins would come in at the low end of guidance. So when the company posts Q4 earnings this afternoon, we’ll be listening closest to its guidance for Q1.

We’ll cover RIM’s Q4 earnings LIVE this afternoon, beginning at 4 p.m. ET. We’ll also live blog the company’s earnings call at 5 p.m. ET. (See our homepage for the link.)

Will the slower first quarter — and RIM’s maturing products — help the company’s gross margins improve? Or at least stay level?

RIM’s gross margins have fallen to around 40% from more than 50% a year ago, as a result of selling new, more sophisticated phones, and increased marketing spend. Gross margin guidance lower than 40% could send investors running away, while an uptick would be good news.

We’re also curious what RIM’s management has to say about forthcoming BlackBerry devices; competing with Apple’s improved iPhone 3.0 software (due out this summer) and the forthcoming Palm Pre; and the new BlackBerry app platform, which launched yesterday.

Key Stats:

  • Q4 Revenue: $3.4 billion consensus
  • Q4 EPS: $0.84 consensus
  • Q4 Net subscriber additions: 3.5 million preannounced
  • Q4 Gross margins: ~40% preannounced
  • Q1 Revenue guidance: $3.35 billion consensus
  • Q1 EPS: $0.82 consensus
  • Q1 Net subscriber additions guidance: 3.0 million (RBC)
  • Q1 Gross margins guidance: 40%-40.5% (RBC)

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