BlackBerry Earnings Preview: Will It Beat Street Estimates?

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BlackBerry is scheduled to report its fourth quarter and fiscal 2015 financial results tomorrow, March 27. Will the company deliver a surprise and beat the Street’s consensus estimates?

Consensus estimate

Analysts have a consensus estimate that BlackBerry will incur losses of $0.03 per share for the fourth quarter and $0.15 per share for the fiscal 2015 based on data compiled by NASDAQ.

During the same period a year ago, BlackBerry delivered a surprise result. The Canadian smartphone manufacturer posted losses of $0.08 per share, significantly better than the $0.56 losses per share expected by analysts.

Analysts expect BlackBerry to report a 19% decline in revenue to $794 million year-over-year.

The current consensus estimate of $0.03 losses per share is better than its $0.08 losses per share in the same period a year earlier.

BlackBerry stock performance

In November 2013, John Chen took over as chief executive officer of the BlackBerry. He implemented different strategies to turnaround the struggling the Canadian smartphone manufacturer.

The stock price of BlackBerry increased approximately 44% since he became CEO, but the shares of the company suffered a  volatility during the start of 2015 (down over 15% YTD).

BlackBerry Stock Performance

Over the past 52-weeks, the stock traded between $7.01 and $12.63 per share. The shares of BlackBerry are trading around $9.29 per share, slightly up at the time of this writing, around 12:11 in the afternoon in New York.

BlackBerry investors’ focus

The investors of BlackBerry will focus on its revenue for the quarter to weigh the effectiveness of Chen’s turnaround efforts. Chen said this is a transition period. He is not yet expecting to report gains from new products and services such as the Passport and Classic smartphones, as well as the new security software.

BlackBerry expects to benefit from its new products and services by summer this year. The company aims to double its revenue from software to $500 million in the fiscal 2016.

Investors will also focus on BlackBerry’s sales performance of its devices. The company launched the Classic smartphone last December. The impact of the device on the company’s fourth quarter sales is expected to be minimal because its availability in the market was slower than expected.

Furthermore, investors will pay close attention to BlackBerry’s outlook. During the previous quarter, investors were surprised when the company reported positive cash flow, which was earlier than expected. Investors will also focus on the company’s profitability guidance. BlackBerry is expected to return to profit by 2016.

Five out of the 36 analysts covering BlackBerry recommend a Buy rating while 20 have a Hold rating on the stock.

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