BlackBerry (BBRY) is expected to report fourth quarter earnings before the open on Friday, April 1, with a conference call scheduled for 8:00 am ET. BlackBerry manufactures and markets mobile devices, such as smartphones, and creates software and services for those devices.
EXPECTATIONS: Analysts are expecting losses per share of (10c) on revenue of $563.18M. The consensus range is (21c)-0c for EPS on revenue of $537.2M-$586.0M, according to First Call.
LAST QUARTER: On December 18, BlackBerry reported a loss per share, excluding certain items, of (3c), versus analysts' consensus estimate for a (14c) per share loss. The company's adjusted revenue of $557M topped the consensus expectation near $489M. The company said that 29% of its non-GAAP revenue in Q3 came from software and services, 31% from service access fees, and 40% from hardware and other revenue. At the time, Executive Chairman and CEO John Chen said, "To sustain our current direction, we are stepping up investments to drive continued software growth and the additional PRIV launches. I anticipate this will result in sequential revenue growth in our software, hardware and messaging businesses in Q4." On the company's earnings conference call, Chen said the company was comfortable with guiding Q4 EPS in line with analyst estimates, which at the time were at (11c) per share, and that BlackBerry expected Q4 revenue at about the same level or slightly above Q3 revenue. NEWS: In a CNET interview published on January 6, CEO John Chen said the company plans to release one or potentially two phones in 2016, both using the Android operating system. Regarding the company's recently-released Priv, Chen said sales were "so far, so good," adding that he is taking a "cautiously optimistic view." On January 29, BlackBerry announced that it received approval from the Toronto Stock Exchange to amend its current normal course issuer bid in order to increase the maximum number of common shares that may be repurchased from 12M common shares to 27M common shares. On February 24, BlackBerry announced that it had acquired UK-based Encription Limited. "Among other things, Encription specializes in penetration testing - which means they can mimic the techniques of malicious hackers and take those learnings to educate and mitigate the cyber risks posed by criminal hackers," the company said in the blog post announcing the deal. Earlier this month, BlackBerry's senior marketing manager for developer relations Lou Gazzola confirmed in a blog post that Facebook (FB) will discontinue support of their essential APIs for BlackBerry and that Facebook's WhatsApp will end support for BlackBerry 10 and BBOS at the end of 2016.
STREET RESEARCH: On the day after the company's last quarterly report, JPMorgan analyst Rod Hall upgraded BlackBerry to Neutral following a period of restriction on the name. BlackBerry's "solid revenue beat" on better software revenue and higher smartphone selling prices showed "signs of life," said Hall, who kept a $9 price target for the shares. The same day, analysts at RBC Capital said the company was "no longer at the brink" since its growing software revenue will probably constitute 27% of its total revenue next quarter, exceeding its declining service revenue. RBC added that it believed the company now has sufficient free cash flow to finance its investments in software, although it noted that the firm expects these investments to weigh on BlackBerry's EPS in Q4. RBC raised its price target on the stock to $9 from $8 but kept a Sector Perform rating on the name. On February 2, TD Securities initiated coverage of BlackBerry with a Buy rating and $9 price target.
PRICE ACTION: On the day of the company's last earnings report, BlackBerry shares rose about 10%. Over the last three months, BlackBerry shares are down about 12.7%. In late morning trading, BlackBerry was up 1.2% to trade near $8.10 per share.
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