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PREVIEW-RIM likely to report steady growth for quarter

Published 06/16/2009, 08:00 AM
Updated 06/16/2009, 08:09 AM
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* RIM seen as resilient in tough economy

* Analyst expects "pretty good" report, outlook

* Average forecast for $0.92/shr, before items

* Reports results Thursday, June 18

By Wojtek Dabrowski

TORONTO, June 16 (Reuters) - Fresh competitive threats and economic pressures from the recession probably will not have slowed the momentum of BlackBerry maker Research In Motion when it reports results later this week.

Analysts expect RIM will put up solid numbers for subscriber additions, gross margins and the number of BlackBerry smartphones shipped when it posts its first-quarter results on Thursday.

"RIM has shown throughout the recession continued strong subscriber growth, continued growth in market share and continued growth -- more importantly -- on both the enterprise as well as the consumer side," independent technology analyst Carmi Levy said.

The enterprise market -- a jargon term for corporate clients -- has grown steadily for RIM even as analysts fretted that companies might cut spending on gadgets like the BlackBerry as their business shrank in the economic slowdown.

Consumers have also remained eager to buy the latest BlackBerry models, including the touch-screen Storm, designed to compete against Apple Inc's iPhone.

Indeed, if RIM hits its forecast by adding up to 3.9 million new subscribers in the latest quarter, its total user base will stand at about 29 million.

As always, analysts will pay close attention to the company's forecasts on all these measures in the current quarter and beyond.

"In this environment, you're not going to want to be too aggressive, but you do want to represent what you're seeing," Broadpoint AmTech analyst Mark McKechnie said, adding: "We're expecting a pretty good report and outlook."

For the first quarter, ended May 30, analysts expect RIM to post earnings of 92 cents a share before one-time items, on revenue of about $3.4 billion, according to Reuters Estimates.

RIM itself has forecast earnings between 88 and 97 cents a share and revenue of $3.3 billion to $3.5 billion.

"They haven't preannounced, so we should be more or less in line" with what the company has already said, said Duncan Stewart, an analyst at DSAM Consulting in Toronto.

If Waterloo, Ontario-based RIM were faring significantly worse than its forecast range, it likely would have issued a profit warning.

Fresh competition from updated iPhones and Palm's well-received Pre smartphone are not yet denting BlackBerry sales, but analysts are watching them carefully.

"Make no bones about it, they both represent a significant competitive threat to Research In Motion," Levy said.

The iPhone is now being offered at prices that are much lower than when it made its debut. The lower prices could prompt some consumers to buy the Apple handset over a BlackBerry. The Pre, on the other hand, has received favorable reviews but still has a small footprint.

Investors seem confident of RIM's ability to withstand the economic and competitive threats. Its shares have more than doubled since dropping to a year low of C$44.23 on the Toronto Stock Exchange in December.

Even at its current level of about C$90, the stock remains well off its year high of C$150.30 that it reached in June 2008.

($1=$1.13 Canadian) (Editing by Rob Wilson)

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