What to Expect From BlackBerry Earnings

BlackBerry Limited (NASDAQ: BBRY) is scheduled to report fiscal third-quarter financial results before the markets open on Tuesday. The consensus estimates from Thomson Reuters are calling for a net loss of $0.01 per share and $331.92 million in revenue. The same period from last year had a net loss of $0.03 per share and $548 million in revenue.

During the past quarter, BlackBerry entered into a licensing agreement with telecom joint venture in Indonesia, BB Merah Putih, to manufacture, distribute and promote BlackBerry-branded devices running BlackBerry’s secure Android software and applications. This partnership is expected to accelerate BlackBerry’s overall focus on driving software growth, specifically developing and licensing device software offerings, including security solutions and applications, through its Mobility Solutions business unit.

At the same time, management said that the company is on track to deliver 30% revenue growth in software and services for the full fiscal year. It also upwardly revised the EPS outlook to a range of breakeven to a five cent loss for the fiscal year, compared to the previous consensus of a 15 cent loss. This reflected increased confidence based on improving margins and reduced interest expense from the recent refinancing of BlackBerry’s debt, as well as planned investments in growth areas.

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A few analysts weighed in on BlackBerry ahead of the earnings report:

• Credit Suisse reiterated an Underperform rating with a $6 price target.
• Wells Fargo reiterated a Market Perform rating.
• MKM Partners reiterated a Neutral rating with an $8 price target.
• TD Securities reiterated a Buy rating with a $10 price target.
• Canaccord Genuity reiterated a Hold rating with an $8 price target.
• Imperial Capital has an $8.50 price target.
• RBC Capital Markets has a Neutral rating with a $7.50 price target.
• Macquarie has a Neutral rating with an $8.50 price target.
• Morgan Stanley has an Equal Weight rating with a $7 price target.
• Goldman Sachs reiterated a Sell rating with a $6 price target.

So far in 2016, BlackBerry has underperformed the broad markets with the stock down 16.5% in this time.

Shares of BlackBerry were last trading around $7.75, with a consensus analyst price target of $7.74 and a 52-week trading range of $6.23 to $9.46.

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