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From: Sam4/30/2011 11:47:40 AM
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RIMM, MMI: Analysts’ Reactions
By Teresa Rivas
* Friday, April 29, 2011 ET
blogs.barrons.com

Shares of both Research in Motion (RIMM) and Motorola Mobility (MMI) were on the move today, the former down more than 13% on its disappointing first quarter guidance, the latter up nearly 12% on its earnings report.

Here’s what analysts are saying about RIMM:

Gleacher & Co. analyst Stephen Patel downgraded stock from Buy to Neutral and lowered his target price to $56: “International growth (up 94% y/y) helped overshadow a weak U.S (down 9% y/y) in FY11, but with RIMM pointing to slower sales in Latin America, we are more concerned that international will no longer be able to compensate for softness in North America. Weakness in Latin America could be an early sign that competitor inroads will not be confined to the U.S. market. New products later than expected with stale products putting RIMM in a deeper hole. Certain new products will launch in late FY2Q, 1-2 months later than our expectation for June-July launches. We estimate that 1/4 to 1/3 of Blackberry subscribers in the U.S. who came up for contract renewals last quarter switched to other platforms, leading to an estimated net ~1mil subscriber losses in the U.S. North American subscriber losses will likely continue as we await new products, and we are concerned that each passing month creates a higher bar for new Blackberry products and lowers the odds of RIMM being able to stabilize U.S. share. We still see NOK’s transition as a large opportunity for RIMM once compelling new products launch. However, with both currently competing on older products, RIMM’s May guidance does not yet provide evidence of share gain vs. Nokia”

Caris & Co. analyst Robert Cihra reiterated a 2* Above Average rating and $70 price target on the stock: “Mostly a product cycling dynamic directionally still in line with our model, we only end up shaving 1c off our FY12 EPS estimate to $6.70, but this does keep us well short of RIMM’s more aggressive $7.50 guide, which management maintained. We think virtually across-the-board BlackBerry refreshes starting this summer (e.g., Bold Touch, Torch 2 and multiple new Curves) set up a big 2H rebound, though with an even heightened RISK profile in terms of new product longevity. Specifically, we’d continue to worry that from a platform standpoint, while RIMM’s new Playbook tablet intro’s its powerful new multitasking QNX OS, RIMM is not planning to launch QNX-based “super-phones” (e.g., dual-core) until early CY12, which makes us question how excited users/carriers may be for this year’s evolutionary OS 6.1 vs. waiting for the complete (and architecturally overdue) QNX-scaled re-write. This said…we see under-valued potential in BlackBerry’s ability to keep carving out a unique lower-cost SKU/value-added hardware+software+ service “niche” as smartphones effectively take over share of the >1.6B unit cell phone market, with our estimate RIMM plus Apple still just COMBINE at 8%-9% of all cell phones in CY11E.”

BGC Partners analyst Colin Gillis reiterated a Sell rating and $45 price target on the stock: “We are not changing our SELL rating and are concerned on future downward revisions. That said– it is worth pointing out that the market the company serves is that rare combination of being large and fast growing. We keep an open mind to the fact that there could be traction with new products in the future but we expect that Playbook shipments may be closer to our 2M estimate than the 5-6M range. Until we start to see positive data points there is no change to our SELL rating and $45 target. RIMM has $2.7B in cash ($5.15 / share) and no long term debt as of February 26, 2011. The company generated $1B in cash from operations in Q411.”

Sterne, Agee & Leach analyst Shaw Wu maintained a Neutral rating and and lowered his price target by $5 to $55: “While we understand and appreciate that RIMM is making a big effort to turn itself around in closing the gap against Android and iPhone by rolling out a new generation of BlackBerries, we continue to believe the key risk is that gross and operating margins could come under pressure as we have seen in the past when it rolled out new models. The issues at hand are: (1) BOM (build-of-materials) costs go up as touchscreens require much more expensive displays and components including semiconductors and sensors and (2) royalty payments increase with the move to 2G -> 3G -> 4G networks where RIMM has a relatively weak patent portfolio. Ironically, we believe it may be smarter for RIMM to stagger the roll-out to avoid maximum dilution at once.”

Raymond James analyst Steven Li maintained an Outperform rating but lowered his target price from $77 to $71: “We already thought having QNX BlackBerries only arriving in 2012 (and no game changing products in between) was just asking for trouble with iPhone and Android gathering ever more momentum. Still, we were surprised with this lowering of guidance, particularly given that RIM’s F1Q12E guidance was barely one month old. This further clouds FY12E EPS visibility despite RIM maintaining its $7.50 EPS guidance. While management remains confident that upcoming “BlackBerry 7” phones expected this summer will drive significant volume, we have little visibility of that market acceptance, more so given Torch, which was also heavily touted last summer as an iPhone/Android comparable, failed to make significant inroads. We are staying the course mostly because QNX – which is PlayBook’s OS and also RIM’s future OS for smartphones – is finally something that is fast, fluid with amazing multi tasking that we think should compete well against iOS and Android. However, in the near-term, RIM’s shares could just tread water until we get some positive datapoints on either PlayBook or emerging markets or if BlackBerry 7 manages to surprise the skeptics next week at BlackBerry World. We also await the arrival of the Android App Player – which would allow Android apps to run on the PlayBook and other future QNX BlackBerries. The app players are expected to be available in the summer.”

Here’s what analysts are saying about MMI:

CL King analyst Lawrence Harris reiterated a Buy rating and $29 price target: “Motorola was able to offset the advent of the new Apple products at Verizon with increased sales in Latin America and China, as well as the introduction of the ATRIX 4G at AT&T. Verizon sold 2.2 million iPhones during the quarter, which was essentially in-line with but not above expectations. Motorola appears to be withstanding the impact of the iPhone better than other vendors such as Research in Motion, which pre-announced disappointing results last night.”

Canaccord Genuity analyst Michael Walkley reiterated a Hold rating on the stock but revised his price target upward to $25: “Motorola Mobility reported Q1/11 results with revenue and pro forma EPS slightly above our estimates, primarily driven by better than expected smartphone sales in China and Latin America. Management guided Q2/11 EPS of breakeven to $0.12 versus our $0.05 estimate. Our longer term concern remains increasing smartphone competition from larger Android-based OEM.”

Evercore Partners analyst Alkesh Shah reiterated an Overweight rating and $37 price target: “With $12 per share of cash, the stock trades at only 5-6x our FY2012 estimate of $2.14. As market share gains from new products (Bionic, ATRIX extensions, XOOM extensions), and broader international distribution occur over the next 4-6 quarters, we expect upside to earnings and its multiple. The largest risks are product launch execution, competition and potential commoditization due to multiple Android OS vendors.”

MKM Partners analyst Tero Kuittinen reiterated a Buy rating and $35 price target: ” We find relief in the company announcing its 20-23mn smartphone unit and 1.5-2mn tablet projections for 2011 after mounting concerns over the impact of the Bionic delay. We believe the upcoming Droid X2 launch can help offset at least half of the lost Bionic sales at Verizon during the spring quarter – we expect it to have a clear price advantage over Samsung Charge and LG Revolution during the quarter, as well as offering notably better power consumption. We believe the moderately priced Defy continues to have robust traction in international markets during the spring quarter. We expect the Asian and European expansions to have a possible impact on earnings during the second half of the year. However, we believe it is crucially important for the company to grab a healthy chunk of Symbian market share that may be carved up by Nokia’s rivals during the summer and winter. Atrix is arriving at what we view as a great time to exploit Nokia’s high-end problems in Latin America, Asia and Europe. We anticipate that European LTE launches of the summer are going to be another interesting opening for Motorola.”

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From: Bill Wolf5/11/2011 8:22:38 AM
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Playing Motorola's New Smartphone Stock

By BOB O'BRIEN
The four-month-old stock has a peer-industry multiple but outsize earnings-growth expectations.

There are no second acts in American lives, F. Scott Fitzgerald once insisted. But don't tell that to the executives at Motorola Mobility Holdings (ticker: MMI), the spinoff company now responsible for the latest generation of Motorola smartphones.

Once a dominant name in the cellphone industry, Motorola became known for not keeping up with the times. Successful product innovations like the StarTac and the Razr were followed by duds -- and periods of unprofitability to match.

Motorola Mobility Holdings (MMI)
[B-TRA-MMI-0510]
Stock Price: $25.56
52-Week High: $36.54
52-Week Low: $22.56
Market Cap: $ 7.4 billion
Est. 2011 EPS: $ 0.80 per share
2011 P/E: 31 times
Est. Long-Term EPS Growth:* 7%
Est. ('11/'10) EPS Growth: N/A
Revenue (trailing 12 months): $13 billion
Dividend Yield: None
CEO: Sanjay K. Jha
Headquarters: Libertyville, Ill.

* Based on analyst estimates looking ahead three to five years.
Sources: Thomson Reuters

And critics of the newly cast mobile-phone company have reasons to wonder if this new company is the same old Motorola phone division in a new dress.

After all, the stock, which launched in early January, had a nice run-up before falling back to earth. It's slightly down from the price it commanded when it split from the rest of Motorola, an entity now called Motorola Solutions (MSI).

But bulls say Motorola Mobility is once again snatching victory from the jaws of defeat. And they may be on to something: With 27 smartphone models, it's selling feature-laden handsets at premium prices. Its average mobile-phone price in the first quarter reached $229, up from an ASP (average selling price) of $130 in 2009. It sold more than four million smartphones in the first quarter of this year, up 78% year-over-year, while shipping a higher-than-expected 250,000 units of the tablet product it introduced this year.

Trading at 14 times next year's earnings, it has got essentially a peer multiple, even though Wall Street's long-term earnings-per-share growth estimates are high for the sector. Analysts project there's at least 25% more upside over the next several months – Tero Kuittinen, who covers mobile devices at MKM Partners, puts the price target at $35 for this $25.54 stock.

"This is a company that's made some pretty bold moves over the last two years," says Kuittinen, who has a Buy rating on the stock.

Later this week, Motorola Mobility will roll out the Droid X2, its key product launch for the spring, which is aimed at the Verizon Communications (VZ) network. That will complement its existing relationship in North America with AT&T (T).

Motorola Mobility has beefed up its presence in critical international markets, having gotten its Atrix smartphone on the Orange U.K. platform ahead of rivals from Korea making comparable products. Networks in Brazil have lavished promotional backing on the Atrix, continuing the company's already-strong Latin American momentum. Its non-North American sales now account for 50% of activity, up from 25% in just one year.

"The driver of this growth, we believe, is continued traction at AT&T as well as international expansion in markets such as China and Latin America, which is increasingly becoming evident," Credit Suisse mobile analysts wrote in a recent report.

Meanwhile, the bulls insist that investors aren't giving enough credit to Motorola Mobility's home-electronics business, which manufactures set-top boxes and DVRs, and contributed $903 million in revenue last quarter, nearly one-third of sales. The share price also doesn't fully reflect the market value of the nearly 17,000 patents that Motorola Mobility holds. Intellectual property can be a valuable asset when used strategically.

Skeptics rightly note that Motorola still flubs new-product rollouts. Last month, the company said it plans to delay the launch of its first 4G smartphone, the Droid Bionic, possibly until later this summer. Analysts expect the handset market to put a premium on nimble product launches. Because so many smartphone manufacturers use Google's Android operating system, there's a lot of "me, too" products available.

As a result, product cycles are likely to shorten, and handset makers are going to have to develop a reliable pipeline. The ubiquity of the Android pipeline lowers barriers to entry – Google gives Android away – and gives both carriers and consumers leverage.

There are also questions about Motorola's push into the tablet market: One analyst from a boutique research operation excoriated the Xoom as "an epic flop."

Ultimately, though, Motorola couldn't afford to cede the tablet market to Apple and the host of rivals flooding in, lest it be accused of missing another product cycle. "If Motorola doesn't compete in tablets, they'd be taking a huge risk," insists MKM's Kuittinen.

"We continue to be positive on Motorola Mobility in light of its strong product momentum this month," Kuittinen says.

Given the share's reasonable price, we're inclined to go with him on this.
Full Disclosure

•MKM Partners has a Buy rating and a $35 price target on Motorola Mobility Holdings.

•Credit Suisse has an Outperform rating and a $31 price target on Motorola Mobility. The firm has performed investment banking services to Motorola within the last 12 months.

E-mail: bob.obrien@barrons.com

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From: Bill Wolf5/11/2011 4:17:33 PM
   of 3432
 
MMI: Needham Starts at Hold; How Soon A Commodity?
By Tiernan Ray

Charlie Wolf of Needham & Co., who last week cut his rating on Research in Motion (RIMM) to Hold for its failure to maintain competitive products, today initiated coverage of Motorola Mobility (MMI) with a Hold rating, writing that Moto’s strategy of riding Google’s (GOOG) “Android” coat-tails could become increasingly risky this year.

There are two risks, as he sees it: there will be a proliferation of smartphone licensees of Android (some would say there are already a plethora), and, closely tied to that, there is a risk that Moto won’t be able to sufficiently differentiate itself as Android devices become commodities.

Moreover, he sees the same risk to Moto’s efforts with Android tablets, despite the fact that its “Xoom” tablet has gotten positive reviews so far.

“Since Android phones run on the same operating system, the major risk facing Motorola and the other licensees is the Android platform could commoditize, sending margins into value-destroying territories.”

Because smartphone growth is exploding, and because the devices are sold through carriers, subsidies have kept Android from commoditizing — meaning, no one buys them on price alone, he implies. As smartphone growth slows, Wolf expects carriers to press Moto and other vendors for lower prices on a wholesale basis.

He notes, “Google has licensed Android to over 40 manufacturers; and the only option for many second-tier licensees, located in emerging markets, is to capture share through aggressive pricing rather than differentiating features and services.”

On the strength of 20% revenue growth, Motorola Mobility should earn $0.85 in 2011 as the company leverages the fixed components in its expense structure. We do not anticipate that Motorola Mobility will experience smartphone sales shortfalls or increasing margin pressures in 2011 because the Android platform itself is growing so rapidly. However, 2012 could be a different story. We expect Motorola Mobility’s revenue growth to slow to 15% in that year. We also expect that pricing and gross margin pressures will begin to emerge as growth in the Android platform slows. With little additional leverage available in its expense structure, Motorola Mobility’s 2012 earnings should rise modestly to $1.10 per share.

I would note Wolf’s estimate is higher than the 80 cents analysts are estimating this year, but the 2012 figure for $1.10 is well below the consensus $1.70.

Moto shares today are down 41 cents, or 1.6%, at $25.13.

Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved

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To: Bill Wolf who wrote (3408)5/12/2011 7:58:38 AM
From: JakeStraw
   of 3432
 
>>“Since Android phones run on the same operating system, the major risk facing Motorola and the other licensees is the Android platform could commoditize, sending >>margins into value-destroying territories.”

I think that's a given...

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From: Bill Wolf5/27/2011 5:39:49 PM
   of 3432
 
Moto: Handset Biz Fetches Almost Nothing, Says Goldman
By Tiernan Ray

Folks, my apologies for coming late to the following: Goldman Sachs’s Simona Jankowski today reiterated a Buy rating on shares of Motorola Mobility (MMI), and a $34 price target, writing that the stock is undervalued based on a sum-of-the-parts analysis, and that upside in smartphone sales could boost the bottom line.

On the valuation side, the handset business may be trading at only one or two times projected earnings per share, because the current stock price is almost entirely reflective of the other assets: $8 per share in deferred tax assets, $11 per share in cash, and the $3 to $4 per share that the set-top box business may be worth. (Regarding the deferred tax asset, $2.4 billion, she observes it, “is currently largely offset by a $2.3 billion valuation allowance due to MMI’s recent lack of profitability, thus it does not fully appear on the balance sheet.”)

Of course, the handset business has been losing money, and the question is whether it will finally turn profitable this year.

Jankowski thinks it will, and she assigns a 7 times P/E multiple to the 2012 estimated EPS of $1.61 cents per share for that unit. That would produce a stock value of $11.29 per share just for handsets.

Moreover, every 1 million extra smartphones Moto sells will produce another $50 million in net income, or 17 cents per diluted share on an annual basis, she estimates. She’s currently modeling the company selling 20.4 million units of smartphones this year, out of a total of 42.5 million units, which includes tablet computers (“Xoom“) and feature phones.

Moto shares today rose 30 cents, or 1%, to $24.94.

Copyright 2011 Dow Jones & Company,

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From: JakeStraw6/21/2011 2:47:41 PM
   of 3432
 
Credit Suisse analysts downgraded shares of Motorola Mobility (NYSE: MMI) to an "underperform"

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From: Bill Wolf6/21/2011 6:28:48 PM
   of 3432
 
Moto: Buy, Says Gabelli, Android Strategy Can Work
By Tiernan Ray

Folks, lost in the shuffle earlier today was a research note from Gabelli & Co.’s Hendi Susanto offering a rare favorable view of Motorola Mobility (MMI), which has been taking quite a few knocks of late, including this morning’s downgrade to Underperform by Credit Suisse.

Susanto argues that the turnaround effort, based on riding the wave of Google’s (GOOG) “Android” software, is working.

“We continue to see progress on MMI’s turn-around which is centered on its partnership with Google,” writes Susanto. “This partnership has enabled the company to accelerate product development and establish a stronger product portfolio with advanced technical specifications such as LTE.”

Susanto who rates the stock Buy, has a $31 price target on the stock, using a 7 times multiple of enterprise value to Ebitda for both the mobile devices and the home networking business.

Susento has a fairly optimistic picture of Motorola’s return to profit in its handset business: from a loss of $76 million in Ebitda last year, the company may bounce back to $310 million in positive Ebitda this year, and $475 million next year. Credit Suisse’s Kulbinder Garcha this morning had forecast just $80 million this year and $400 million next year.

That’s based on a higher estimate of how many smartphones the company will ship this year: 21 million units, versus Garcha’s roughly 19.4 million-unit estimate. The company’s goal of as many as 23 million units, when including its tablet computer projections, is realistic, in Susanto’s view.

Moto may see its smartphone market share rise from 4.5% last year to 4.7% this year, 4.8% next year, and 5% by 2013, Susanto thinks.

Garcha sees $1.10 in non-GAAP EPS this year, well above the average 78 cents estimate, based on revenue of $14.03 billion, ahead of the average $13.4 billion estimate.

MMI stock today fell 70 cents, or almost 3%, to $23.79.

Copyright 2011 Dow Jones & Company,

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From: Bill Wolf6/22/2011 6:12:09 PM
   of 3432
 
2 Buys and 1 Sell From Private Capital Management's Mutual Funds


Technology sector: Buy Motorola Mobility Holdings (MMI). PCM added $40 million to its $540 million position from the previous quarter, including adding a new $21 million position in SAIC Inc. (SAI), a provider of scientific engineering system integration and technical services, primarily to U.S. government entities. a new $23 million position in Motorola Mobility Holdings (MMI), a manufacturer of wireless handsets, set-top boxes and video distribution systems for home, network and telecom markets. MMI is an attractive buy as it trades at a forward 15 price-to-earnings (P/E) based on fiscal year 2012 earnings, and it is projected to grow revenue and margins strongly in the near term. Furthermore, analyst targets for MMI are in the mid-$30s to $40 range. BMC trades at a forward 16 P/E, which is mid-range based on its historic P/E range. It has been up strongly 60% in the last year while revenues and earnings are up only in the teens.


seekingalpha.com

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From: JakeStraw6/28/2011 2:43:04 PM
   of 3432
 
BMO Capital Markets analysts downgraded shares of Motorola Mobility (MMI) from a "market perform" rating to an "underperform" rating.

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From: Bill Wolf7/21/2011 1:46:20 PM
   of 3432
 
Surprising Price Movement Found In Shares Of (NYSE: MMI)



Motorola Mobility Holdings, Inc. (NYSE: MMI): traded higher by 20.08% or $4.50/share to $26.91 In the past year, the shares have traded as low as $20.77 and as high as $36.54. On average, 3344260 shares of MMI exchange hands on a given day and today's volume is recorded at 8414100. The shares are currently trading above the 200-day moving average which indicates that the shares have been subject to upward momentum. The 200 DMA is above the 50 DMA which indicates that the stock has likely taken a dip in the shorter term. The stock may eventually drop to test the 200-day moving average where buyers may be lurking near the $26.2524 area.

takeoverchatter.com

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