BlackBerry Ltd (BBRY): Canaccord Genuity Lowers Estimates

BlackBerry Ltd (BBRY): Canaccord Genuity Lowers Estimates
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) continues to lumber on, and most analysts and investors no longer hold out hope for a turnaround. Canaccord Genuity analysts have actually lowered their estimates for the company based on sales trend surveys from October and November.

BlackBerry’s sales trending even lower

Analysts T. Michael Walkley, Matthew D. Ramsay and Siddharth Sinha said their surveys of handset sales in October and November indicate that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s handset sales remain weak. Prices of BlackBerry 10 devices continue to fall, and inventory levels remain high in spite of the company’s efforts to move handsets. The analysts believe that at this point, BlackBerry sales have fallen more than 50% year over year. Their surveys also suggest to them that sales even remain soft among enterprise customers, because of uncertainty about the company’s future and the bring your own device trend many businesses are following.

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They are estimating that BlackBerry holds just a 1.4% share of the smartphone market, compared to a 4.2% share in the third quarter of last year and a 15% share in the third quarter of 2010. As a result, they revised their 2014 fiscal year unit estimates from 19.7 million to 19 million, which would be a 33% year over year decline. They also lowered their fiscal 2014 “pro forma” losses per share from 82 cents to $1.09 and their fiscal 2015 estimate from $1.24 to $1.28 per share.

BlackBerry’s future looks bleak

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) put itself up for sale over the last few months, getting investors excited about what a deal could mean for the company. It received only one offer from a consortium of investors led by its largest shareholder Fairfax Financial Holdings Ltd (OTCMKTS:FRFHF) (TSE:FFH). That tentative deal was abandoned, however, possibly because the buyout group couldn’t secure financing to complete it.

Since that deal fell through, the Canaccord Genuity analysts say it is unlikely that any possible buyers, if any, remain interested in buying BlackBerry, especially if its board remains fixed on selling the company in its entirety. The analysts now believe a breakup of the company is more likely because they think the competition in the smartphone market is too much for it. They note that the longer BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) puts this off, the worse the company’s fundamentals are going to get. However, they maintained their $6 per share price target and Hold rating based on their sum of the parts analysis, which remains unchanged at this time.

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