RBC Capital analyst Mark Sue this morning trimmed his financial forecasts for Research In Motion to reflect the BlackBerry maker’s continued market share losses.
Sue now sees revenue for the February 2013 fiscal year of $13.7 billion, down from a previous projection of $14.9 billion, with profits of 96 cents a share, down from $1.95. Street consensus is for $15.3 billion and $1.95.
“With supply chain data showing a backup to RIM’s products we’re reducing our unit estimate for the current quarter,” he writes in a research note. “In the ever competitive smartphone market, Nokia, RIM, Motorola, Sony, LG, and a slew of others are donating market share while Samsung and Apple continue to gain market share. For the quarter ending in May we’re now estimating 9 million units vs. the consensus of 10.5M units and RIM may soon be in danger of dipping below 5% global market share. Limited scale at that point can lead to shrinking operating margins and in our worst case scenario RIM may burn cash next year. The good news is that RIM has no debt.”
Sue thinks that even RIM’s core enterprise market is now at risk as the bring your own device trend continues to gain ground. “RIM is resorting to price cuts to boost sell-through, but that many not be enough to stem the tide, in our view,” he writes.
Sue keeps his Sector Perform rating and $13 target price on the stock.
RIMM is up 41 cents, or 2.9%, to $14.44.
