BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) released its August quarter earnings report on Friday, greatly missing expectations and taking a nearly $1 billion inventory write-down. Evercore analysts note that the report was really just a formality and believe that at current prices, BlackBerry offers a balanced risk / reward.

BlackBerry BBRY

BlackBerry shares dip below $8

In pre-market trading at the NASDAQ, shares of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) slipped more than 1 percent to fall below $8 a share. All eyes now rest on the offer from a consortium led by Prem Watsa’s Fairfax Financial, which is currently the struggling company’s biggest shareholder.

Friday’s report carried few surprises, although the results were even a bit worse than expected. Evercore analysts Mark McKechnie and Zachary Amsel lowered their estimates for the company’s fiscal 2014 year to a loss of $1.24 per share on revenue of $8.6 billion, compared to $1.03 per share on $8.8 billion. Nonetheless, they have kept their Equal-Weight rating and $8 per share price target on BlackBerry.

BlackBerry fails to disclose services revenue

They note that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) did not disclose its subscriber loss, but they believe it was worse than expected. They estimate a 2.5 million net subscriber loss during the August quarter, which resulted in services revenue of about $722 million. That’s a 9.7 percent sequential decline and a 30 percent year over year decline.

The analysts said this implies a monthly average revenue per user of $3.39, compared to $3.60 in the previous quarter. They attribute the weakness in average selling price because of concentrated subscriber losses from regions with higher average selling prices.

Will the Fairfax deal close?

Since the offer from Fairfax was announced, analysts have been debating about whether that deal will actually close. Many don’t believe it will, either because the consortium won’t be able to secure financing because of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s weak financial situation, or because BlackBerry won’t pass the due diligence process.

Evercore analysts believe the deal will succeed, although they note that if it doesn’t, the stock could fall to $6 or $7 per share. They see potential upside if a higher bid does emerge, although it doesn’t sound likely that this will happen, especially in light of Friday’s results.

BlackBerry offers unlocked smartphones directly

In the wake of the almost $1 billion inventory write-down reported with the August quarter results, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has since made another decision in an attempt to prompt more handset sales. Darrel Etherington of TechCrunch reports that the company is now selling unlocked BlackBerry Q10 handsets for $549 and Z10 handsets for $449 on its website. The unlocked versions of the handsets are only available in the U.S. The only question now is whether those prices will be low enough to convince buyers to take the leap and switch.