Byron’s Astle: Five Long Shot Positives that Could Surprise in RIM’s Q4

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Research in Motion's Q4, 2012 will be new CEO Thorsten Heins' first at the helm.

Research in Motion's Q4, 2012 will be new CEO Thorsten Heins' first at the helm.

After the market close on Thursday, Research in Motion (TSX:RIM) will announce its Q4 2012 and full fiscal year results.

The negativity that has dogged the Waterloo mobile device maker for the better part of two years has now reached near consensus. JMP Securities analyst Alex Gauna’s take on the matter is a common one. “Its going to be a weak quarter…” he told Alastair Sharp of Reuters, adding: “It’s going to continue to amplify fears”

Byron Capital’s Tom Astle doesn’t have a rating on Research in Motion, but he watches the company closely. Astle says that while RIM appears to be supported on the downside by a tangible book value of $12 plus a patent value he estimates at $2, its a good thing, because its hard to imagine any other upside right now. But, just for argument’s sake, said Astle in a research note today, “let’s use our wildest imagination to see we can come up with any potential positives” he opines might lift RIM off its book value.

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Astle came up with five things that could save the company from another “crushing quarter”. While he assigns varying levels of hope to each, it is clear the Byron analyst doesn’t believe any of them are as much as an an even proposition.

First, says Astle, there’s the possibility that RIM, which he says couldn’t even “make it to supper on time last year” might actually be on track with BlackBerry 10. The Byron analyst says he is encouraged that RIM has announced it will offer a BB10 prototype at its upcoming developer’s conference.

The second longshot he mentions is that the BlackBerry Playbook incentives may have actually worked. Astle points to the low potential for downside surprise here because the company took a writedown on the device in the last quarter.

The third thing Astle wonders aloud is “What if There Are Signs the User Base Is Stabilizing?” He says we may be getting to a point where the user count has stopped falling and only hard-core crackberry users are left on the platform.

Astle’s fourth point is about emerging markets. As we pointed out recently in Cantech Letter, RIM is the top device in many countries with large populations and low rates of smart phone penetration. Could the numbers coming back from places Indonesia and India be better than expected?

Astle’s last point is that, unlike other recent quarters, RIM didn’t issue an earnings warning. “What if analysts actually had to raise their estimates? he asks.

Share of Research in Motion on the TSX closed today down .6% to $13.82.

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