BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares continued falling during Monday trading, declining another 6 percent at the NASDAQ as investors continue to react poorly to Friday’s bad news. Analysts at several firms have issued reports with their take on the news. Deutsche Bank analysts have maintained their Sell rating and $6 a share price target for the company’s stock. They expect more job cuts at the company will be forthcoming.
Meanwhile, the popular BlackBerry Messenger app, which was supposed to roll out to iOS and Android over the weekend, is still nowhere in sight.
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Even harder decisions expected for BlackBerry
Things just look dimmer and dimmer for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) as it struggles to find a buyer or decide what to do going forward. The company announced it would cut 4,500 jobs on Friday, which amounts to about 40 percent of its workforce. Analysts Brian Modoff and Kip Clifton at Deutsche Bank say even more job cuts are probably ahead for the company because they don’t see a sale of the company in one piece as being a possibility. As a result, they said it’s important for BlackBerry to get operational expenses “to a realistic number.”
In Friday’s preannounced results, the company reported expected revenue of $1.6 billion for the second quarter of the year, which is far below expectations of about $3.1 billion and even Deutsche Bank’s estimate of $2.9 billion. BlackBerry also said it would write off about $945 million in handsets, with most of those being the BlackBerry Z10.
The company is in the process of launching the BlackBerry Z30, and the analysts remain surprised that BlackBerry is going ahead with the launch even though it is taking such a huge hit on the Z10. The Z30 is basically a larger-sized Z10. They also note that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s new handset is coming out right in the middle of the launch of the new iPhones, which will likely be another big problem for the company.
BlackBerry Enterprise 10 “a bright spot”
The Deutsche Bank analysts said one area that see as a bright spot for the company is BlackBerry Enterprise Server 10. They said the company did increase the penetration of it to 25,000 commercial and test customers from 19,000 in July. However, they question how many of these customers are just testing the server and how many of them are actually paying.
They believe most of the additions are test customers rather than paying ones. As a result, they said converting those test customers into paying ones should be a big priority. They believe if the company can do this, then it might have a chance of making it as a much smaller stand-alone company which offers end-to-end enterprise solutions.
But what about BBM?
One thing the analysts don’t mention is BlackBerry Messenger, the popular messaging app the company was planning to roll out to iOS and Android over the weekend. Many have seen BBM as being one of the company’s few positive areas, but BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has even failed in the launch of this app.
The company said over the weekend that there was an “unreleased version of the BBM for Android app posted online.” It went on to say that there was great “interest and enthusiasm” in the app and that they are still working to address the issues raised by users of that app. The news came in a post that’s dated Saturday, although we have yet to hear another update from the company.
Looks like BBM will remain in limbo, at least for now. As if BlackBerry needed something else to go wrong right now.