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Research In Motion's Shares Touch Record On Eve Of Earnings
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SAN FRANCISCO (Marketwatch) -- Investors have been anticipating a strong performance for Research In Motion, shares of which hit a record high on the eve of the company's fourth-quarter financial results to be issued after Wednesday's close.
The Waterloo, Ontario-based wireless-device maker has seen its shares gain nearly 10% in the last month, finishing above the $148 mark on Tuesday.
At midday, the company's U.S.-listed shares traded at $146.68, down about 1% from the previous close.
Research In Motion is expected to report a sharp jump in earnings for the fourth quarter ended March 3, thanks to strong demand for the popular BlackBerry wireless device.
Analysts are also watching closely for what the company's forecast for the coming year will show. Weak sales at wireless-device maker Motorola have made some investors nervous that the slowdown could spread to makers of high-end smartphones such as RIM and Palm.
Palm cooled some of those concerns last month when it reported third-quarter results that most analysts considered "solid."
Research In Motion may see a boost from the launch of its latest Blackberry device. The launch last month of the Blackberry 8800 met with strong demand, analysts said.
That could help push revenue higher by 66% for the fourth quarter from the same period last year, according to consensus estimates compiled by Thomson Financial from analyst estimates.
The contrast from a year ago will, in all likelihood, be especially visible on the bottom line.
Turnabout in fortunes
During the year-earlier fourth quarter, RIM was still enmeshed in a nasty patent-infringement battle that had threatened to shut down its popular wireless e-mail service. The case was settled in March of last year, with RIM agreeing to pay NTP Inc. a total of $612.5 million.
But excluding costs from the lawsuit, RIM's quarterly earnings per share are expected to jump more than 45% from a year ago. Wall Street anticipates that the company will report earnings of 99 cents a share compared to the prior year's earnings of 65 cents, excluding the legal costs.
Revenue for the fourth quarter is expected to come in at $933.2 million compared to $561.2 million for last year.
And for the quarter ending in May, analysts currently expect RIM to, on average, report earnings of $1.04 a share on revenue of $995.25 million, according to Thomson Financial.
"We expect RIMM to report strong February-quarter results and we see some upside to our forward EPS estimates for May and fiscal 2008 based on continued traction for the Pearl and 8800 uptake," wrote analyst Tim Long of Banc of America Securities in a note to clients Wednesday.
A less bullish view came earlier this week from Citigroup's Daryl Armstrong, who expects good results for the quarter but feels potential upside for RIM's stock could be difficult to come by from current levels.
"We think much of the good news on this front is already incorporated in the stock," Armstrong wrote in a note Monday.
Rob Sanderson of American Technology Research called the 8800 shipments a "wildcard" for the quarter and thinks the company will safely exceed estimates without it.
"We believe the upper-end of guidance was achieved without much contribution from the 8800 and the ramp of this important new product will be reflected in Q1 guidance," wrote Sanderson, who rates the stock as a buy, in an April 5 note.
(END) Dow Jones Newswires"
Tags: [thomson] [citigroup] [tim] [rim] [sharp] [ntp]
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