What to Watch This Week: RIMM, Builders, For-Profit Schools and Cards
There's never a dull moment on Wall Street. Let's go over some of the items that will help shape the week that lies ahead.
1. Dark days for BlackBerry: All of the Windows Phone 8 news issued by Microsoft (MSFT) in recent days should remind smartphone fans that there once was another company that had IT departments giddy with the wireless possibilities.
Research In Motion (RIMM) has been largely forgotten in the smartphone chatter, and perhaps rightfully so. We live in a world where Android and iOS devices rule. The only reason that we're entertaining Windows as a mobile operating system is because Microsoft is an eccentric billionaire that loves to throw big money at pet projects.
Well, RIM will be back in the spotlight -- at least temporarily -- when it reports its latest quarterly results Thursday.
As you can imagine, it's going to be ugly. Analysts see revenue declining by a whopping 36%. The chunky $1.33-a-share quarterly profit that the Canadian company posted a year earlier is expected to be replaced by a mere 1 cent a share in earnings.
2. The school is in your computer: The downside to the University of Phoenix is that the online school's fraternity row is a bit of a snoozefest. Don't even get me started on the intramural program or the sorry state of the student union center.
Apollo Group (APOL) is the company behind the University of Phoenix. It's a more popular choice for folks wanting to secure college degrees than you probably think. The virtual school's enrollment in degree programs registered at 355,800 students in Apollo's most recent quarter. Unfortunately that's 12% below where it was a year earlier.
For-profit postsecondary educators have come under fire lately over the ineffectiveness of their programs, their uninspiring graduation rates, and their crummy student loan repayment rates.
Some companies are holding up better than others, but investors shouldn't be surprised to see Apollo posting declines in revenue and profitability when it reports early this week.
3. Homebuilder, sweet homebuilder: The news has been mixed when it comes to residential real estate, and that's with the market being fueled by historically low mortgage rates.
There are still too many people living in homes that are now worth less than what the homeowner still owes on the property, and potential homebuyers have a right to be worried. There's a reason a lot of people are deciding to rent rather than buy.
Lennar (LEN) and KB Home (KBH) are two of the more prolific homebuilders, and both will be reporting this week.
Analysts expect a profit out of Lennar and a loss out of KB Home, but both builders are expected to improve on their bottom-line performances from a year earlier.
4. Send your condolences: Remember when you used to get greeting cards on your birthday. Aunt Sally would stuff a $10 bill in there. High school graduation? Boom! More greeting cards would pour out of the mailbox. Aunt Sally went for a $20 bill that time.
Well, greeting cards appear to be a lost art form. Too many people will settle for a simple animated online greeting card or a quick "Happy Birthday" on Facebook.
No one misses the glory days more than American Greetings (AM). The greeting card and stationery giant has made some smart moves to matter on the digital end of things, but it may not be enough. Wall Street's braced for profitability to decline when it reports Thursday.
Get well soon, American Greetings.
5. Watching windows: Friday will be the last trading day of this year's second quarter, and that means some money managers will engage in window dressing, the silly practice where fund managers buy the winners and shed the losers so it seems as if they had a great quarter. Do they really think investors aren't comparing actual performance relative to a fund's peers?
Some institutional investors never learn.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of American Greetings and Microsoft and creating a bull call spread position in Microsoft.