Optimism (for now) over RIM earnings

Research in Motion reports its fiscal third quarter earnings Thursday and analysts are tripping over themselves to be optimistic--or at least hedge their gloomy long-term outlook. International growth is expected to carry the quarter for RIM as observers look ahead to the launch of the PlayBook tablet.

Wall Street is expecting earnings of US$1.64 a share on revenue of US$5.4 billion. Analysts have been gradually becoming more optimistic about RIM based on its QNX operating system, which will power the PlayBook. Until the PlayBook arrives, RIM is expected to thrive with international sales and an enterprise upgrade cycle.

A sampling of a few prognostications about RIM's third quarter:

• Morgan Stanley analyst Ehud Gelblum says RIM will report a strong quarter shipping 14.4 million devices, up 19 percent from the second quarter. The US$99 Torch cut inventory levels and boosted sales.
• Scott Sutherland, an analyst at Wedbush, said RIM's quarter will be better than expected. "While we have continued concerns over enterprise stickiness, erosion in enterprise messaging and thus margins as well as market share losses, we expect this to be offset by international growth, new phones, introduction of the PlayBook, and stock buyback," said Sutherland.
• FBN Securities analyst Michael Burton says RIM is "not dead yet". Burton said the consensus view is that this is RIM's "final good quarter before it dies at the hands of Android and Apple." Burton has his doubts about RIM too, but upgraded the stock. Short-term momentum, the PlayBook and new product launches mean "it's a little too early to call the time of death on RIM".

Read more of "Research in Motion earnings: Optimism abounds (for now)" at ZDNet.