Shares of Research in Motion (RIMM) are down 37 cents, almost 3%, at $13.79, after Jefferies & Co.’s Peter Misek this morning reiterated an Underperform rating on the shares and cut his price target to $12 from $15, warning that the company will miss estimates for the fiscal Q4 ended in February, and will probably also deliver lower results than expected for the new fiscal year.
Misek cut his estimate for this quarter just ended to $4.16 billion in revenue and 69 cents EPS from a prior $4.59 billion and 82 cents. That is below Street consensus of $4.57 billion and 82 cents.
For the 2013 fiscal year, Misek sees $17 billion in revenue and $1.87, down from a prior $17.4 billion and $2 per share. The Street is modeling $18.1 billion and $3.07 per share.
Misek thinks RIM may have sold only 10.5 million BlackBerry units last quarter, versus his prior estimate for 12 million units, and RIM’s own forecast for 11 million to 12 million, citing data from his “survey work.”
Even if the company manages to hit its targeted range, weak “sell through” — that is, units actually bought by individuals — may leave enough inventory as to cause a very weak outlook for shipments in the May quarter, he thinks.
While RIM’s higher end handsets are continuing to try and fight off Apple’s (AAPL) iPhone and the various Google (GOOG) Android competitors, and the company faces the threat of having Microsoft (MSFT) and Nokia (NOK) upstage the introduction of new “BB10” handsets later this year, at present, the danger is that RIM’s cheaper phones are struggling in various geographies, he argues:
We believe RIM’s low-end handset sales trends have continued to deteriorate in North America, Latin America and Europe. In particular, sales in Europe decreased significantly towards the end of the quarter. We believe this is very negative as sales outside of the U.S. had typically been more resilient. Our checks indicate that sales in Asia seem to be okay.
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