RIMM: BB10, Cash Burn, Ecosystems in Focus Heading to FYQ3 Report

Shares of Research in Motion (RIMM) closed down 11 cents, or 0.8%, at $13.93 today as the Street issued another batch of cautious reports in advance of the company’s fiscal Q3 report for the three months ended in November, which is expected Thursday, after the bell.

The new reports come as RIM rolls out its invitations today to media for the BB10 unveiling on January 30th in New York. BB10, which is meant to be the new face and brains of the BlackBerry, is going into beta testing with over 120 enterprise and government customers, the company said today.

Analysts are, on average, modeling revenue to fall 48%, year over year, to $2.66 billion, yielding a 36-cent net loss per share.

Shaw Wu with Sterne Agee today reiterated a Neutral rating on the shares, writing that the consensus is too pessimistic: he’s modeling $2.81 billion and a 24-cent net loss.

Wu thinks the company still has to prove there’s room for a third or fourth mobile “ecosystem” outside of those created by Apple (AAPL) and Google(GOOG):

But does the world really need a third or fourth mobile OS touchscreen platform? And what makes it different? So far, developer support and customer adoption have been lukewarm so it remains to be seen if carrier hope wins out. To us, it’s not just the number of apps, but the quality of apps, and whether developers are making money and customers are using them.

But the more important question is the cash burn and whether it’s sustainable:

We think the most important metric remains its $2.3 billion cash balance which the company has been able to sustain despite big operating losses through changes in working capital and conversion of accounts receivable. It is not clear how sustainable this is as this is an accounting maneuver as opposed to an improvement in its fundamentals. The other big question is whether the company has a sustainable profitable business model where it needs to invest heavily to keep up with the vast resources of AAPL, GOOG, and MSFT. The company is currently losing several hundred million dollars per quarter with profitability likely 4-5 quarters away.