Blackberry (BBRY) Shares Higher on Third Quarter Earnings

Shares of Blackberry Ltd (BBRY) were trading up +0.35 or +4.49 percent to $8.15 per share in Friday’s premarket after the company announced a narrower than expected loss for the company’s fiscal year 2016 third quarter early this morning. The stock was up as much as +11 percent right after the news release. Blackberry Ltd shares closed at $7.80, down -0.38 or -4.65 percent in Thursday’s regular trading session.

Waterloo, Ontario based BlackBerry Ltd, originally known as Research In Motion Ltd is a Canadian wireless equipment and telecommunications company best known for developing the BlackBerry brand of smartphones and tablets.
The company had been having severe setbacks due in large part to competition from the Apple AAPL iPhone and Samsung SMSN Galaxy smartphones, which have taken a large share of the smartphone market.

In 2010, Blackberry dominated the smartphone market, with 43 percent of U.S. market share. After the iPhone and Android entered the market, Blackberry’s market share has declined to only 1.2 percent as of June of 2015. The majority of the company’s current value consists of Blackberry’s patent portfolio, which has been estimated to be worth between $2.0 and $3.0 billion.

On a GAAP basis, Blackberry reported a net loss of $89 million for the quarter or $0.17 per share versus a loss of $148 million or $0.28 per share in the same period one year ago. On a non-GAAP basis, after the exclusion of non-recurring items and a pretax charge of $38 million for restructuring and acquisition costs, the company reported a loss of $0.03.

Non-GAAP revenue came to $557 million with GAAP revenue of $548 million versus $793 million in the same period last year. The analyst consensus was for the company to report a loss of $0.14 per share on revenue of $489 million.

Blackberry had 2,713 enterprise customer wins in the third quarter with approximately 70 percent of software revenue recurring; however the company did not disclose the number of smartphone handsets sold in the quarter. Software sales increased to $161.5 million versus $52 million in last year’s third quarter.

John Chen, Blackberry’s Executive Chairman and Chief Executive Officer said in the company’s press release that, “I am pleased with our continued progress on BlackBerry's strategic priorities, leading to 14 percent sequential growth in total revenue for Q3. We delivered accelerating growth in enterprise software and higher revenue across all of our areas of focus. Our new PRIV device has been well received since its launch in November, and we are expanding distribution to additional carriers around the world in the next several quarters.”

Chen concluded saying that, “BlackBerry has a solid financial foundation, and we are executing well. 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.”

Blackberry is striving to meet Chen’s goal of $500 million in annual software sales by March of 2016. Blackberry stock was down -29 percent year to date as of yesterday’s close. This morning’s action is showing the stock selling off, from being up +10.6 percent after the news release to just over +3.0 percent before the bell.

Other News About BBRY

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Luxoft, BlackBerry Team To Make Cars Semiautonomous

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Published on Dec 18, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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