BlackBerry (BB) To Report Q4 Earnings: What's In Store?

BlackBerry Limited (NYSE:BB) is scheduled to report fourth-quarter fiscal 2019 financial results (ended Feb 28, 2019) before the opening bell on Mar 29. In the last reported quarter, the company delivered a positive earnings surprise of 50%.

Let’s find out how things are shaping up prior to the announcement.

Factors at Play

As a leading player in the enterprise mobility management, BlackBerry is widely recognized for productivity and security innovations. The cybersecurity software and services company provides one of the most secure mobile enterprise solutions through a broad portfolio of products and services.

Further, the company offers an end-to-end software and services platform for the Enterprise of Things, including computers, vehicles, sensors, equipment and other connected endpoints within the enterprise that communicate with each other to enable smart business processes. With a holistic growth model, focusing both on organic and inorganic investments, BlackBerry aims to expand its leadership in the mobility segment. The company’s strategy to capitalize on the market’s profitable opportunities with BlackBerry Spark — its platform to communicate between smart endpoints — augurs well.

During the fiscal fourth quarter, BlackBerry completed the acquisition of Irvine, CA-based cybersecurity firm Cylance for $1.4 billion in cash. Cylance’s highly skilled cybersecurity workforce and market-leading portfolio of endpoint solutions are a strategic fit for Blackberry (TO:BB) and is likely to complement its Unified Endpoint Management and QNX businesses. The company further expects the buyout to enhance the cybersecurity capabilities of Blackberry Spark, making it an indispensable proposition for Enterprise of Things.

BlackBerry also launched QNX Platform for Digital Cockpits — the world's first digital cockpit solution — to enable automakers to provide superior in-car experience with security, safety and reliability features. BlackBerry's ISO 26262 hypervisor ensures that the multiple operating system environments powering the cluster, infotainment and other driver information systems do not interfere with one another and impact critical-driving functions.

In addition, BlackBerry is committed to helping the private and public sectors, accelerating the development of Smart Cities and Intelligent Transportation Systems with a Security Credential Management System service. The company also scaled its BlackBerry Secure technology and licensing strategy to enable the electronics industry to bring-to-market safe and secure IoT devices.

Increasing market traction of coveted solution offerings for a broad array of customers will likely translate into top-line growth. For the quarter, the Zacks Consensus Estimate for total revenues stands at $227 million, down from $239 million reported in the year-earlier quarter. This is primarily due to changes in the accounting and sales model (implementation of ASC 606). Adjusted earnings per share are pegged at 4 cents, down from 5 cents reported a year ago.

What Our Model Says

Our proven model does not conclusively show that BlackBerry is likely to beat earnings this quarter as it does not have one of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Earnings ESP: BlackBerry’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 4 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

BlackBerry Limited Price and EPS Surprise

Zacks Rank: BlackBerry currently sports a Zacks Rank #1, which increases the predictive power of ESP. However, the company’s 0.00% Earnings ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Comcast Corporation (NASDAQ:CMCSA) has an Earnings ESP of +4.53% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eldorado Gold Corporation (NYSE:EGO) has an Earnings ESP of +38.89% and a Zacks Rank #2.

Comfort Systems USA, Inc. (NYSE:FIX) has an Earnings ESP of +12.73% and a Zacks Rank #2.

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