RIM Lowers Expectations, Bids for Certicom

rim-logoBlackberry maker, Research In Motion, has lowered its expected Q3 earnings. RIM has now cut Q3 adjusted earnings between 81 and 83 cents, down from its first forecast of 89 to 97 cents per diluted share. The company has also lowered its Q3 revenue expectation to $2.75-$2.78 billion, down significantly from $2.95-$3.10 billion.

In more news RIM has made an unsolicited offer to buy Certicom, a Mississauga, Ontario, CAN, based cryptographic technology company for $66 million in cash, or $1.50 per share (a 76.5% premium over Certicom’s closing price today of $1.23). Interestingly, overnight, Certicom’s stock price jumped significantly from $0.7 per share to $1.23. RIM CEO Jim Balsillie said “”We believe our proposed offer is fair, reflects the full value of Certicom and takes into account the growth prospects” There is no other information relating to whether the deal will be accepted by shareholders.

I personally see trouble ahead for RIM. RIM will have increased competition from the iPhone, among other phones in the consumer market including the new and powerful Nokia N97. The Blackberry might simply be too simple for the consumer market, and as more phones now support seamless push e-mail with IMAP idle, consumers might stay away from the Blackberry and opt for more ‘fun’ phones, if you will.


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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to hercules@business2press.com
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