By Dhirendra Tripathi
Investing.com – BlackBerry stock (NYSE:BB) slumped 4% Wednesday after the company’s projection of fourth-quarter revenue from its cybersecurity solutions disappointed traders.
The company expects fourth-quarter revenue from the vertical to come in at $135 million at the top end, around 11% higher than Q4 Fiscal 2021. According to Refinitiv data, one analyst expected the company to peg that forecast at $143 million. On the lower side, the company expects cybersecurity to deliver $125 million in fourth-quarter revenue. That will mean just $3 million more on year-on-year basis and lower on a sequential basis.
The somber outlook comes as shortage of chips have crippled production at automakers, some of whom are Blackberry’s clients. Growth in the cybersecurity vertical, which accounts for more than half of the company’s revenue, has been sluggish, impacting the overall business. At $128 million, revenue from cybersecurity in the quarter ended November 30 was lower on both year-on-year and sequential basis.
Blackberry’s revenue in their third quarter fell to $184 million, around 16% lower than the year-prior quarter, but came in ahead of estimates. Lower operating expenses helped it swing back to a net profit of $74 million, compared with a loss of $130 million in the third quarter a year earlier.
Chief Executive Officer John Chen expects automotive supply chain issues to ease in the current quarter and help boost demand for its QNX car software, used by the likes of Volkswagen, BMW and Ford.