Is BlackBerry Ltd On The Cusp Of A Turnaround?


BlackBerry released their third quarter fiscal 2015 earnings report on December 19th. The wireless phone and software company continued to report losses this year as it struggled to compete with the iPhone, though some are optimistic that BlackBerry is on the heels of a big turnaround.

Highlights from the Q3 2015 report include earnings per share of $0.01 on a non-GAAP basis and cash flow of $43 million, a quarterly increase of $7 million. The non-GAAP profitability and positive cash flow are substantial breakthroughs for the company. However, BlackBerry posted revenue of $793 million, a 34% year-over-year decrease, well below analysts’ estimates of $931.5 million. The majority of revenue is attributed to hardware and services sales, with BlackBerry reporting approximately 1.9 million smartphones sold in the third quarter.

CEO John Chen stated, “We achieved a key milestone in our eight quarter plan with positive cash flow. We also attained another important milestone in the release of our new enterprise software products and devices. Our focus now turns to expanding our distribution and driving revenue growth.” Chen was appointed CEO of the struggling company in November of 2013 and has been an integral player in turning the company around.

Blackberry also announced on December 19th its acquisition of Secusmart, a security solutions company often employed by government organizations. The acquisition allows BlackBerry to strengthen its “leadership in secure enterprise mobility with Secusmart’s encryption and anti-eavesdropping capabilities” and bolster its “end-to-end offerings that provide the highest level of security from the device to the management platform.” This purchase comes at an opportune time since Sony’s cyber hack attack is fueling the media.

On December 19th, analyst Maynard Um of Wells Fargo reiterated a Market Perform rating on BlackBerry with a price target of $10. Um noted that hardware sales were only $365 million, falling $27 million below his estimates. However, BlackBerry’s service revenue of $375 million was not far off his estimate of $370 million. The analyst believes that the BlackBerry Classic, the newest smartphone release, will benefit cash flow if it can be distributed on a broader basis.

Um has a 69% overall success rate recommending stocks with a +15.4% average return rate per recommendation.

Separately on December 19th, analyst Timothy Arcuri of Cowen & Co. also reiterated a Market Perform rating on BlackBerry though he did not provide a price target. Arcuri noted that the $0.01 EPS was “driven by a second consecutive quarter of positive non-GAAP gross margin in Hardware.” However, the analyst remains cautious noting, “Software growth remains the critical driver of the long-term turnaround and near-term transition momentum is heavily reliant on Hardware growth.”

Arcuri has a 75% overall success rating recommending stocks with an average return of +17.7% per recommendation.


The top analyst consensus on TipRanks for BBRY is Hold.

It seems that BlackBerry is on the cusp of a turnaround, but will it ever reclaim its place as a wireless communications powerhouse?

To see more recommendations for Blackberry, visit TipRanks today!

Sarah Roden writes about stock market news. She can be reached at

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

About the Author

TipRanks was founded in 2012 with the goal of giving power back to the individual investor. Our hope is that by making analyst performance data easily available and highly visible to the investing public, TipRanks will not just help save others from our investing mistakes, but will also bring back accountability, objectivity, and transparency to the business of stock picking and analyst reports. TipRanks is proudly unaffiliated with any investment firm.

2 Comments on "Is BlackBerry Ltd On The Cusp Of A Turnaround?"

  1. Re: “Is BlackBerry Ltd On The Cusp Of A Turnaround?”. How can they be when they are still doing the same thing that caused their demise in the first place?? R: “Now it appears that Mi-Corporation has announced its support for the Microsoft Cloud for Government and described its work to deliver best-of-breed Mobile Data Capture solutions for Government inspectors in the field in order to boost productivity, increase efficiencies, reduce costs and provide better service to citizens at agencies.” Wow enterprise solutions is a very competitive space.

  2. Yup, Blackberry is turning around, and around, and around, and around!

Leave a comment

Your email address will not be published.