North America

Earnings Preview: BlackBerry Q3 2017 (BBRY)

By: Craig Bowles

Overview

BlackBerry Limited (BBRY) is slated to report 3Q 2017 earnings before the bell on Tuesday, December 20th. The earnings release is expected at approximately 7:00 a.m. ET followed by an 8:00 a.m. conference call available at BlackBerry Investor Relations. The company was formerly known as Research In Motion Limited and changed its name to BlackBerry Limited in July 2013. Turnaround specialist John Chen became CEO in November 2013.

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Outliers & Strategy

Key measures:

  • Adjusted/Non-GAAP Earnings Per Share (EPS): The Street estimate is $(0.01) with a range of $(0.03) to $0.04. (source: Yahoo! Finance). Analyst consensus was $(0.05) three months ago.
  • Earnings Per Share (EPS): If an Adjusted EPS figure is not available, this value would compare with forecasts.
  • Revenues: Analysts expect $331.92 mln (range $311.54 mln to $347.00 mln).
  • Adjusted Earnings Per Share (EPS) Guidance for FY2017: Company guidance is currently a range of $(0.05) to $0.00. Analysts expect $(0.01) with a range of $(0.05) to $0.05.
  • Price/Book of 1.8 compares to a 5-year average of 1.2; Price Sales of 2.6 compares to a 5-year average of 0.9.
  • Analysts view BlackBerry with 2 Buy, 13 Hold, and 2 Sell ratings (source: MarketBeat.com).
  • On January 29, 2016, BlackBerry announced an increase to its existing share-repurchase program. The amount is for up to 27 million shares, or 5.8% of the float. The original amount had been 12 million, or 2.5% of the float.
  • BlackBerry shares have a 1-day average price change on earnings of 4.59%. Options are pricing in an implied move of 6.66% off earnings.

Recent News

  • 12/15: BlackBerry Ltd said China’s TCL Communication Technology Holdings Ltd would make and sell BlackBerry-branded mobile devices globally, according to a post on Reuters.com.
  • 12/14: Credit Suisse reiterated an Underperform rating on BlackBerry while noting that the software portfolio is average, at best, and has been built up by acquiring average software assets, according to a post on Benzinga.com.
  • 12/09: BlackBerry consolidated security software products. BlackBerry Secure, as it is called, is based off of BlackBerry’s software security platform, which helps companies manage and secure their mobile devices and connected things, according to a post on investopedia.com.
  • 11/29: The BlackBerry DTEK60 has an elegant design and decent specs. A focus on security and productivity might fail to elicit much excitement from non-business users, according to a post on CNET.com.
  • 11/28: BlackBerry has been approved for testing self-driving cars on Canadian public roads, according to a post on Reuters.com.
  • 11/10: BlackBerry is still planning to release a new phone sporting its trademark physical keyboard for those of us who are frustrated with touch screen typos, according to a post on Bloomberg.com.
  • 11/03: BlackBerry has signed an agreement with the Ford Motor to provide software for connected cars, according to a post on Forbes.com.

Technical Review

BlackBerry remains close to 2012 lows and has shown limited duration above the 200-day moving average the past couple of years but seems to perk up late in the year. Volume remains low. Point and figure technicians have already met their bearish objective of $6 in 2015 but a rally back up to $9.50 wouldn’t change their long-term downtrend line. (Chart courtesy of StockCharts.com).

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Summary

BlackBerry plans to end all internal hardware development and will outsource that function to partners. While the company plans to focus on security, a phone with a physical keyboard and approval to test self-driving cars suggests a more complicated future. The company has beaten earnings estimates by an average of 8c the past four quarters. Estimize consensus for earnings of $0.01 on revenue of $338.68 mln compares to analyst consensus of $(0.01) on revenue of $331.92 mln.

 

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