The phony warriors

Research In Motion’s financial results reported yesterday were excellent by any measure. In the fiscal year ended February 26, the company shipped 52 million smartphones, up 43 per cent from the previous year, revenue rose 33 per cent and earnings per share jumped 47 per cent.

But the devil’s in the details, say the all-powerful analysts who follow RIM. Earnings per share in the fourth quarter were $1.78, better than the consensus of analysts at $1.76. But revenues were $5.56 billion, slightly less than consensus of $5.64 billion.

The company’s guidance for the next quarter was lower than consensus but RIM’s estimate for the next full-year earnings per share was $7.50 versus $6.81 for the consensus. All in all, you’d think that such results and official expectations would be enough to add zest to share price.

Well, you’d be wrong. In after hours trading yesterday, share price fell more than 12 per cent. When markets open this morning, prices will fall to match that outcome. And all this with RIM’s PlayBook about to go on sale in twice as many retail outlets as Apple’s iPad.

I don’t own RIM shares, but I’m fed up with herd-mentality analysts who overlook record results and focus instead on their unfounded fears. I know that past performance is no guarantee of future results, but I think the pendulum has swung too far. Too many good companies and their shareholders suffer as a result of analysts who like to move markets, especially down, all for the sake of personal aggrandizement and bragging rights.