) to sell from hold, citing the company's quarterly results.
Analyst Brian Modoff said the company's $490 million revenue was ahead of his $477 million estimate, while the 61 cents pro forma earnings per share beat his 60 cents estimate. However, he notes that backing out inventory writedown/warranty accrual adjustments, earnings per share were 57 cents, below all expectations. Gross margin was also light at 54.9% vs. his 56.5% estimate. He says that while Research in Motion had moderately positive top- and bottom-line guidance, estimates for sub growth came in below his estimates. He views this and other items as cautionary signs of growth slowing, and thinks the company may not be able to meet (sizable) market expectations for long-term growth. He cut his $65 target to $60.