RBC Cuts Research in Motion Estimates

Will investors shrug off a cut in Research in Motion's (RIMM-NASDAQ) second quarter estimates heading into RIM's first quarter earnings release tonight?

RBC is cutting their Q2 revenue estimates to $2.5-2.6 billion from $2.6-2.7 billion and EPS to $0.91-0.94 from $0.94-0.97 (consensus $2.4 B and $0.90)

RBC has been constructive on the stock, but RIM has been a bit coy regarding launch dates for the Blackberry Bold, due primarily to testing issues as it certifies the new product offering.

RIM's stock peaked as Co-CEO Jim Balsillie announced the launch of the Bold in mid-May, and while the concerns are likely to blow over, valuation concerns might finally begin to cap the stock's upside. And certainly, in the short term, launch dates are paramount.

RIM's second-quarter guidance could offer clues on how early the BlackBerry Bold will ship and how it could affect the company's fortunes, says Romeo Dator, co-portfolio manager of the All American Equity Fund, which has RIM as one of its holdings.

“What the market will be focusing on is the guidance, and that needs to reflect that RIM won’t be late in shipping the Bold,” says Dator.

The news today should have been expected to some extent, as the comments of Balsillie on May 12th laid out the challenges RIM faced in certifying the phone:

May 12th

Nervous nellies could certainly set the tone in the first hour or two of trading today, but one trader’s daytrade to the dark side can be an investors long-term entry point.

The bigger question might be, when does multiple contraction begin to offset the earnings growth, and cap the stock’s upside? It has been a remarkable run for the gang in Waterloo, and it probably ain’t over just yet.
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Update: Tech Ticker handicaps the landscape:

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RIM: RBC Capital cuts Q2 ests on Bold delay
Notable Calls

Research In Motion Eyes Bold New World
The Street.com
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