RIM shares sag on brokerage reports

Mon Oct 20, 2008 5:32pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - Research In Motion shares fell as much as 10 percent on Monday after one brokerage said retail sales trends for its BlackBerry smartphones in North America and Western Europe were weaker than hoped and another cut its earnings forecasts.

In a note on Monday, Pacific Crest Securities analyst James Faucette said so-called "sell-through" trends throughout the middle of October had been "slightly disappointing".

He also said risks to November-quarter results were building as the company becomes more reliant on "aggressive and successful" launches of its BlackBerry Storm and BlackBerry Bold models in the United States.

"In order to hit the company guidance, these new products have to be more successful," Faucette said.

As well, early sales of the BlackBerry Pearl Flip have been tepid at best and sales execution problems in Canada and Britain are plaguing Curve and Bold sales, he said.

Also on Monday, brokerage Morgan Keegan & Co Inc downgraded its revenue and earnings outlook for RIM, citing the "substantial worldwide damage" to the broader economic outlook since September.

In a note, analyst Tavis McCourt forecast RIM's revenue in 2009 of $11.08 billion, revised down from $11.55 billion, and $17.31 billion in 2010, down from $19.58 billion.

For earnings, McCourt sees $3.47 a share in 2009, revised down from $3.75, and $4.49 in 2010, down from $5.84.   Continued...

<p>Jim Balsillie, co-chief executive of Research In Motion (RIM), holds the new Blackberry Bold handset during its launch in Mumbai September 18, 2008. REUTERS/Punit Paranjpe</p>