RIM Q1 Earnings Preview: Good Chance For Beat And Raise Despite iPhone Drama (RIMM)

BlackBerry maker Research In Motion (RIMM) reports May quarter (1Q09) results today after the bell. Investors have recently taken a liking to RIM: Shares are up 8% since June 12, and up 25% since the end of March. May quarter sales should have been strong. But with new BlackBerry models — and Apple’s (AAPL) iPhone — due out next quarter, we’re most interested in RIM’s Q2 guidance.

We’ll cover RIM’s earnings today with LIVE analysis following the release (around 4 p.m. ET) and LIVE coverage and analysis of the conference call, beginning at 5 p.m. ET.

Key Q1 metrics:

Revenue: $2.23-$2.30 billion guidance, $2.27 billion consensus
EPS: $0.82-$0.86 guidance, $0.85 consensus
Net subscriber additions: 2.2 million (guidance), 2.36 million (Citi), 2.3 million (Lehman)
Phones shipped: 5.5 million (Citi)

Q2 guidance:

Revenue: $2.44 billion consensus, $2.5 billion (Citi)
EPS: $0.90 consensus, $0.94 (Citi)
Net subscriber additions: 2.8 million (Citi)
Phones shipped: 6.1 million (Citi)

The good news for RIM: Sales have been strong, especially the Curve via Verizon Wireless, according to Lehman. And new toys coming out in the next few months — the Bold at AT&T (T), the touchscreen Thunder at Verizon — should help, too. Analysts have recently raised estimates above consensus.

The bad news: Apple’s iPhone 3G comes out on July 11 in the U.S. and more than 20 other countries. Apple will add 50 more countries this year. It’s $199 — 50% less than it used to be — and includes direct access to Exchange email servers, which will allow corporate users to replace RIM’s machines if they want to do so. Companies will take a while to switch from RIM, if they ever do. But consumers — which RIM increasingly counts on for growth — may flock to the cheaper, more sophisticated iPhone 3G.

Bottom line: We think there’s plenty of room for both Apple and RIM in the fast-growing smartphone market. So we think a beat and raise is likely, which will send RIM’s stock up. But if RIM’s Q2 guidance comes in below consensus — $0.90 on $2.44 billion of sales — look out.

See Also:
BlackBerry Curve Hot At Verizon, Lehman Jacks Estimates
What 3G iPhone? Expect Another Beat And Raise From RIM
Steve Jobs’ iPhone Gamble: Betting Billions To Beat RIM, Microsoft

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