Earnings Preview: Research in Motion to Report Q1 Earnings After the Bell

Research in Motion RIMM, the embattled handset maker, is set to release earnings after the close on Thursday. On average, analysts are expecting the company to report a loss of $0.01 per share for the quarter ended May 12. Analyst quarterly earnings per share estimates ranged from a $0.35 loss per share to a $0.60 gain per share. In addition, analysts expect Research in Motion's revenues to fall more than 30% from the same period last year to $3.11 billion.

The Canadian company has seen diminishing sales and market share related to increased competition from other device makers, such as Apple AAPL, and phones that run on Google's GOOG Android operating system. Quarterly earnings estimates have been slashed over the past three months from a consensus of $0.66 per share 90 days ago to the $0.01 loss estimated ahead of the earnings.

According to IDC, Research in Motion's Blackberry OS was only being used by 6% of smartphones in 2012, as compared to the 20.5% of smartphones running on Apple's iOS and the astounding 61% using Google's Android OS. Also, analysts predict that by 2016, Blackberry OS will not see market share growth. Without growth in market share in the competitive smartphone market, Research in Motion may face increasing difficulty growing revenues and earnings.

Investors will get a good view into the health of the smartphone and tablet markets in the next several weeks, as Research in Motion, Apple, Google, Nokia NOK, Amazon AMZN, and Microsoft MSFT are set to report earnings by the end of July. Reports from these companies will enlighten investors as to which companies are able to grow market share, steal share, and from whom they are stealing share.

A weak earnings report from Research in Motion could actually be a longer-term positive for the company. Research in Motion has lots of valuable assets and has a large enterprise business, which could be attractive to a strategic buyer. Rumors have circulated as the company's performance has faltered that a buyout is inevitable. So, a weak earnings report could make Research in Motion cheaper, thus inspiring a potential buyer to step in and make an offer for the shares of the company.

Buyout rumors would likely cause the shares to of Research in Motion spike, as companies usually offer a premium to fair value when purchasing a company. Thus, a sell-off in the shares on a weak earnings report could be an buying opportunity for those who believe that a buyout is the inevitable future for Research in Motion. However, doing so could be very risky.