Will BlackBerry Ltd (NASDAQ: BBRY) Call it Quits on its Handset Business?

BlackBerry (BBRY) Information Technology – Computers & Peripherals | Reports September 27, Before Market Opens

Photo Credit: WEi WEi
Photo Credit: WEi WEi

Key Takeaways

  • The Estimize consensus is calling for a 4 cent loss on $393.55 million in revenue, 3 cents higher than Wall Street on the bottom line and $3 million on the top
  • Blackberry is shifting its focus away from the struggling handset business towards a thriving software and services markets
  • Revenue from software and services are expected to double from a year earlier thanks to the strategic acquisitions of Good Technology and Athoc
  • What are you expecting for BBRY? Get your estimate in here!

Blackberry is scheduled to report fiscal second quarter results tomorrow before the market opens. The Canadian smartphone market is engaged in a balancing act between its struggling handset business and relatively successful software and security market. Revenue the past few years still remains under pressure due to sluggish hardware sales. This should remain the case until operations can fully shift over to its software services.

Analysts at Estimize are calling for a 4 cents loss per share, 78% higher than the same period last year. That estimate has dropped 56% since Blackberry’s most recent report in June. Revenue for the period is anticipated to drop 18% to $393.55 million, marking another quarter of negative sales growth. To no surprise shares are down 15% year to date and historically drop an additional 2% following an earnings report. Since the widespread adoption of Apple iPhone’s and Android powered devices Blackberry’s handset business has been largely irrelevant. Its newest device, the Priv, had a short burst of success upon its debut but has since lost its steam. Apart of coming to terms with its downfall, Blackberry recently decided to discontinue its newest operating system, BB 10, and the production of the Blackberry Classic smartphone. The Priv and any potentially new devices will run on Android operating systems.

Beyond handsets, Blackberry has been successful in its ventures as a software and services provider. Many investors believe this will be the company’s main revenue driver this quarter, almost doubling its output from the same quarter a year ago. Strategic acquisitions of Good Technology and AtHoc can be credited with some of those recent gains. Investors will also be keen to hear any commentary on the company’s new trailer tracking radar software as well as its IP licensing and royalty program.
Do you think BBRY can beat estimates? There is still time to get your estimate in here!

Photo Credit: WEi WEi