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MKM Partners analyst Mike Genovese and FBN’s Shibani Joshi on Research in Motion’s first-quarter earnings results and uncertain outlook.
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Huge news in fact -- Research in Motion net reporting a loss of 37 cents.
It was expected have a loss of four cents much larger than expected -- Indeed so let's get some analysis on the results from Mike Genovese -- and Kay and partners senior Telecom equipment analyst along with Shibani Joshi.
Alright Michael and I know you've probably had just a few seconds to look through -- by the -- the stock is still -- we just want to let everybody know that but.
Blackberry ten is delayed much bigger than expected losses here to what do you attribute this.
Let's say the truth.
This earnings reports not really that surprising it's a ballot in line -- though he expected the EPS loss on the headline.
Looks a little bigger because the margins were slightly worse -- when your revenues in the slow a little change in margin.
That's it makes a big dip dip is on the -- but we thought the company -- was gonna miss this consensus.
The important thing here comes into things are really listen to on the conference call is they generate cash even in this terrible quarter that they just had.
But -- I've got a twelve are fair value on the stock for dollars cash.
Four dollars intellectual property and four dollars as the value of the subscribers if it sounds like they're gonna start to burn cash in the future clearly -- -- this company's gonna go below.
What you know we currently think it is.
And subscribers actually actually increased subscribers no no no work no surprise that they lost in North America but internationally increase subscribers so now parts holding up -- -- -- -- think that we I think when the stock -- there's going to be -- knee -- You know down reaction I don't think it's gonna be that bad that's that's.
Clearly you know -- stock has been halted because they're worried about that but I want to go to your body -- body.
Third we don't want -- -- significance of this loss the loss of the walk us that is instead of four cents.
A 37 cents loss and he once the stock begins to trade again after hours.
How big a loss are we gonna see -- we talking 10%.
More or less.
-- I think giving any estimates in terms of what the what the traders are thinking but I think overall -- strategically in big picture everybody was.
Gauging this report to see if we've hit a bottom which shares that are down 36% just this year down 67%.
Over the last year.
I agree with your analysts who just on who said it really wasn't about this quarter's numbers it's about the future for this company.
A big below is that they're new products -- -- we've seen and you iPhone come out we're quite new products we exactly we're seeing new -- Microsoft phone now we're seeing all the competitors come out with some thing.
To generate sales and Blackberry continues to show it just does not have its act together.
The company saying quote we -- aggressively working on strategic review my question is how low what have you been doing the last six to twelve months.
All of that they've -- that that change in management which everybody was begging for but Mike what about.
That new products that we're talking about and and that means -- Blackberry ten here's their quote successful launch a Blackberry ten platform is our number one priority.
Well that's that's been their priority you know this is like I would put out about the fifth time -- -- it's already a year and a half way so now we're in our pushing on another quarter it could very well happen again.
When I looked down -- what is the future of rim where is this company going.
I don't think they're an acquisition target I don't think anyone's gonna buy this -- Samsung -- not certainly not Samsung I don't think Microsoft I don't think FaceBook I don't think that.
-- handsets are really worth anything but the software the operating system like very -- win eventually.
You know has a chance to be a number four operating system out there but I think what's gonna happen in the future most likely is that companies like Samsung -- actually make the hardware.
And part writing Gramm's gonna become just a software company.
And -- and and the question is is -- that they have to get a lot smaller they have to restructure.
But I'm at some point the stocks in the stop going down and -- some value here in the software.
Money they are known for the Blackberry -- they're known as a hardware company -- just wondering if their break up potential.
Selling off their software might give the more than ten in fact going on trade changing their identity from hardware to software.
Well -- -- -- you agree add that that value is in the software here couple things that they are trying to do is that they are trying to generate cash.
And cash and cash savings through -- restructuring also.
Hiring more employees and we -- 5000 employees being asked fired that is double what we thought was going to happen.
So they are taking small baby steps and I think at this point people are saying.
Listing in the put up our -- and get out here I mean and this as sort of -- hurdle that they're playing.
And sitting on isn't really working for investors they wanna -- and definitive action here and this company continues to lag.
Further and further behind the number four player and a big -- yes it's a big market the number four is not you know -- long term gain.
Irony of course is a lot of hard work appraiser target are getting into -- a lot of software companies getting -- hardware now it's the reverse for rim we'll see if they can survive -- Genovese thank you very much for being here and -- partners and of course our own ship.
