BlackBerry (NASDAQ:BBRY) Information Technology - Computers & Peripherals | Reports March 31, Before U.S. Open
Key Takeaways
- The Estimize consensus is looking for earnings of 1 cent per share on $293.80 million, 2 cents higher than Wall Street on the bottom line and right in line on the top
- By any measure Blackberry (TO:BB) no longer commands the respect it previously did in the early 2000s when it once held a dominant position in an infant smartphone industry
- Blackberry expects revenue from mobile security and software licensing to increase by 30% in the fourth quarter
Blackberry prepares to cap off its fiscal 2017 at the end of this slow week of earnings with its fourth-quarter report early Friday morning. By any measure, Blackberry no longer commands the respect it did in the early 2000s when it once held a dominant position in an infant smartphone industry. But now less than a handful of manufacturers still operate in the heavily saturated market with Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Samsung (LON:0593q) sitting firmly at the top. Blackberry’s decade-long decline, on the other hand, forced the Canadian company to pivot into other segments, namely software and mobile security. The shift out of smartphones has somewhat helped resurrect financial performance and share value, which otherwise struggled to stay afloat.
That said, analysts maintain a degree of skepticism regarding the fourth quarter and Blackberry’s prospect of remaining profitable. Estimize users expect earnings of 1 cent per share, reflecting a 145 percent increase compared to the same period year. That estimate, however, dropped 9 percent in the past 3 months. Revenue for the period is forecasted to drop by 39% to $293.80 million, marking over two years of negative top line growth.
Recently, Blackberry agreed to a long term licensing agreement with TCL communications to manufacture Blackberry branded devices for certain countries, a move that further removes it from the waning smartphone business. Instead, it continues to make headwind at mobile security and software licensing, which is expected to grow by 30% this quarter. A recent deal with Ford (NYSE:F) to expand use of its native security software adds credibility to the company’s new offerings. Many investors believe this will be the company’s main revenue driver this quarter as smartphone market share approaches zero.
Half the battle in Friday’s report is whether the results can instill enough confidence in the market to persuade investors to buy shares and boost value. Unfortunately, the opposite typically occurs during earnings season as shares tend to drop between the print and the 5 days after a report. That means the stock can make even greater declines from the 10% fall of the past 6 months. 
Do you think BBRY will beat estimates?