BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is all set to release its earnings on Friday, Sept. 26. With the company coming up with new gadgets and strategies and investors awaiting good things from the company, now is the right time for the company to deliver, says a report from Seeking Alpha by Bill Maurer.
Numbers could favor BlackBerry
Analysts are expecting an adjusted loss of 16 cents per share in the second quarter of the fiscal year after a loss of 47 cents in the year-ago quarter. Maurer expects the company’s revenue to rise sequentially in the November quarter. Also BlackBerry will not have a very steep fall in its numbers with a drop of only 17.5% in revenues, which is far better than the fall of 40% expected by analysts, believes Maurer, who expects revenues to level off into the next fiscal year or even show a year-over-year increase if the company performs well.
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At the end of the first quarter, the company had a cash balance, restricted cash, and investments of $3.1 billion, an increase of $2.65 billion from the end of the previous quarter, the end of fiscal 2014. The increase in the cash and investment was supported by accounts receivables, as well as income tax receivables. The Canadian smartphone manufacturer also had $1.34 billion in long-term debt at the end of the quarter. The cash/investments balance, along with over $1.4 billion in intangible assets, is around two-thirds of the company’s assets, and Maurer notes that if the Canadian firm further lowers its accounts receivables, then the percentage could rise further in fiscal Q2.
Short-sellers wait for earnings
BlackBerry shares are one of the most heavily shorted stocks, and short interest has increased slightly recently. Short interest is just under 89 million shares, which is still halfway down from the peak in June 2013. The positions indicate that investors are waiting for the next earning reports, which will decide the next move to be taken in short interest, believes the author.
Upcoming earning reports will be decisive for the company, and it is an important time when the stock should start reviving to assist the company in advancing with its turnaround strategy towards profitability and cash flow break-even. The 200-day moving average is rising, which would give strong assistance to the stock if at all they slide after earnings, says Maurer, who is confident on the company’s turnaround “story.” BlackBerry shares are less than a dollar from their 52-week high, which the company could break with a strong quarterly report.