Amidst excitement today for the M&A prospectscircling Research in Motion (RIMM), Morgan Keegan’s Tavis McCourt took the opportunity to reiterate a Market Perform rating on the shares, and to emphasize dispiriting details from the company’s 6-K quarterly filing with the Securities & Exchange Commission, which appeared yesterday.
In sum, he observes,
The over-arching themes from Q3:12 were clearly that sell through declined in a new product launch quarter, channel inventory increased despite a sell through decline, and Y/Y growth is getting worse in every region of the world, including emerging markets.
McCourt expects things to get worse after the February fiscal Q4, while the company hangs on until the introduction of its new “BB 10″ software platform for the BlackBerry.
The acquisitions rumors are in fact one of the reasons, along with its existing profit, not to downgrade the shares any lower than Market Perform, McCourt concludes.
RIM shares today are up $1.24, or almost 10%, at $13.76.
McCourt offers some charts to illustrate aspects of the business he thinks typify that decline, including the “rapid” slowdown in the growth rate of the services business.
Morgan Keegan sees a rapid slowdown of services revenue growth as one indicator of long-term decline at RIM.
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