A month has gone by since the last earnings report for BlackBerry Limited (NYSE:BB) . Shares have lost about 15 % in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is BB due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
BlackBerry Q4 Earnings Beat, Software Sales Strong
BlackBerry performed well in the fourth quarter of fiscal 2018 (ended Feb 28), reporting better-than-expected earnings and revenues. The company’s earnings per share (excluding 11 cents from non-recurring items) came in at 5 cents, comparing favorably with the Zacks Consensus Estimate of breakeven earnings. Moreover, the bottom line expanded 150% year over year. Results were boosted by robust software sales.
Quarterly Results in Detail
In the quarter under review, total revenues (on a reported basis) were $233 million, down 18.5% year over year. On an adjusted basis, the metric declined 5.6% year over year to $239 million. However, the reported figure surpassed the Zacks Consensus Estimate of $211 million.
Segment-wise, Enterprise software and services generated approximately 47.7% of the revenues while BlackBerry Technology Solutions contributed 19.2%. Licensing, IP and other raked in 24.3% of the sales, whereas Handheld devices contributed 0.8%. Services access fees revenues accounted for the balance.
Geographically, North America has contributed 63.1% of the total GAAP revenues. Meanwhile, Europe, the Middle East and Africa have notched up 27% of the revenue pie. Similarly, Latin America and the Asia-Pacific regions have yielded 1.7% and 8.2%, respectively, of the total revenues, in fiscal fourth quarter. The company had approximately 3,500 enterprise customer orders in the reported quarter. Quarterly operating income (on an adjusted basis) came in at $19 million compared with $16 million in the fiscal third quarter.
Balance Sheet
The company exited fourth-quarter fiscal 2018 with cash and cash equivalents of $816 million compared with $734 million at the end of fiscal 2017. While long-term debt in the quarter under review was $782 million, the same at the end of fiscal 2017 was $591 million.
Fiscal 2019 Outlook
BlackBerry, which recently sued Facebook (NASDAQ:FB) and its WhatsApp and Instagram messaging units for alleged infringement of its mobile messaging technologies included in its BBM app, expects its total software and services billings to grow in double-digits in fiscal 2019. The bottom line (on an adjusted basis) and free cash flow are also projected to improve in the same period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
VGM Scores
At this time, BB has a poor Growth Score of F. Its Momentum is doing a lot better with a B. The stock was also allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stocks has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision looks promising. It comes with little surprise BB has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
BlackBerry Limited (BB): Free Stock Analysis Report
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