Pacific Crest downgrades Research In Motion (RIMM) to sector perform from outperform.
Analyst James Faucette is concerned over a potential for slowdown in replacement rate of BlackBerry handsets. He says $404.8 million in fourth-quarter revenue was below his $409.4 million in estimate and 71 cents pro forma earnings per share ahead of his 67 cents estimate, on better-than-expected gross margin.
He notes his lower-than-expected handset shipments hurt revenue and cuts his $2.13 billion fiscal 2006 (ending February) revenue estimate to $2.04 billion and raises $2.51 earnings per share to $2.54 on a reduced share count.
Faucette believes the stock may tread water until it clear how Research in Motion will deal with increasing availability of bandwidth to handset and perceived increase in competitive solutions that additional bandwidth could enable.