Motorola Mobility: Xoom, Atrix Both Duds, Pacific Crest Says
Motorola Mobility (MMI) isn’t seeing much love for its current cornerstone smart phone and tablet products, Pacific Crest analyst James Faucette asserts in a research note this morning.
Faucette says channel checks find that sell-through trends for both the Xoom tablet and the Atrix smart phone – that’s the one that you can plug into a laptop-like companion device to take the place of a more conventional notebook PC – “have been disappointing.” He says the Atrix in particular has been hurt by competition from the $49 price points for the Apple 3GS and the HTC Inspire, keeping sales “well below forecast.”
The Pacific Crest analyst chops his 2011 revenue forecast for the company to $12.2 billion from $13.7 billion, cutting his profit projection to 64 cents, from 94 cents. For 2012, he goes to $13.6 billion and $1.10, from $15.3 billion, and $1.73. and he warns that there could be further downside risk to both 2011 and 2012 estimates unless the company can “quickly adjust and refresh its product portfolio” for the 2011 second half and beyond.
That said, he adds that downside in the company’s shares is limited by a strong cash position and the Street’s confidence in management. But he cautions that the company’s weak start this year makes it more important that the company’s next set of products “substantially differentiate themselves from the rest of the pack. If they fail to do so, we believe shareholders
may be looking at another meaningful step down.”
MMI is is up 2 cents at $23.65.
source
Faucette says channel checks find that sell-through trends for both the Xoom tablet and the Atrix smart phone – that’s the one that you can plug into a laptop-like companion device to take the place of a more conventional notebook PC – “have been disappointing.” He says the Atrix in particular has been hurt by competition from the $49 price points for the Apple 3GS and the HTC Inspire, keeping sales “well below forecast.”
The Pacific Crest analyst chops his 2011 revenue forecast for the company to $12.2 billion from $13.7 billion, cutting his profit projection to 64 cents, from 94 cents. For 2012, he goes to $13.6 billion and $1.10, from $15.3 billion, and $1.73. and he warns that there could be further downside risk to both 2011 and 2012 estimates unless the company can “quickly adjust and refresh its product portfolio” for the 2011 second half and beyond.
That said, he adds that downside in the company’s shares is limited by a strong cash position and the Street’s confidence in management. But he cautions that the company’s weak start this year makes it more important that the company’s next set of products “substantially differentiate themselves from the rest of the pack. If they fail to do so, we believe shareholders
may be looking at another meaningful step down.”
MMI is is up 2 cents at $23.65.
source
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