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BlackBerry (BB) Down 5.1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for BlackBerry (BB - Free Report) . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is BlackBerry due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BlackBerry Swings to Loss in Q3, Revenues Decline Y/Y
BlackBerry reported lukewarm third-quarter fiscal 2022 (ended Nov 30, 2021) results with year-over-year top-line contraction. However, accretive design wins and partnerships with major players bode well for the Canada-based company. Sustained demand for cybersecurity and IoT products acted as a significant tailwind.
Bottom Line
On a GAAP basis, quarterly net income came in at $74 million or a loss of 5 cents per share against a net loss of $130 million or a loss of 23 cents per share in the prior-year quarter. Despite top-line contraction, the year-over-year improvement was primarily due to operating income in the reported quarter against operating loss of $127 million in the year-ago quarter.
Non-GAAP net loss was $1 million against net income of $9 million in the year-ago quarter. It reported breakeven on a per share basis compared with 2 cents per share in the prior year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
Revenues
Quarterly total revenues declined 15.6% year over year to $184 million. While revenues from Cyber Security aggregated $128 million, the same from IoT totaled $43 million. Licensing and Other contributed $13 million.
In the IoT business unit, the company is facing headwinds related to the global chip shortage. However, the segment showcased stronger-than-expected performance as a result of accretive design-related revenues in QNX business. This demonstrates BlackBerry’s industry leadership position and secular trends.
In Cyber Security, the company witnessed solid traction for the latest unified endpoint security product launches, fueled by back-to-back partnerships with major players in the market. The segment also delivered solid sequential billings and revenue growth.
Other Details
Gross profit declined to $117 million from $149 million in the year-ago quarter. Total operating expenses plunged to $66 million from $276 million. This was primarily due to a loss in the fair value adjustment of the convertible debentures. Operating income was $51 million against an operating loss of $127 million a year ago.
Cash Flow & Liquidity
In the first nine months of fiscal 2022, BlackBerry utilized $37 million of net cash in operating activities against $30 million generated in the year-ago period. As of Nov 30, 2021, the company had $271 million in cash and cash equivalents with $673 million of long-term debentures.
Q4 Outlook
BlackBerry has issued the segment outlook for fourth-quarter fiscal 2022. IoT revenues are estimated between $50 million and $55 million. Cyber Security business’ revenues are likely to be in the range of $125-$135 million. Licensing revenues are anticipated to be around $10 million for the quarter. However, the projection mark for Licensing segment might change as it is dependent on the sale of noncore portion of BlackBerry’s IP patent portfolio.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 16.67% due to these changes.
VGM Scores
At this time, BlackBerry has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise BlackBerry has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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BlackBerry (BB) Down 5.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for BlackBerry (BB - Free Report) . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is BlackBerry due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BlackBerry Swings to Loss in Q3, Revenues Decline Y/Y
BlackBerry reported lukewarm third-quarter fiscal 2022 (ended Nov 30, 2021) results with year-over-year top-line contraction. However, accretive design wins and partnerships with major players bode well for the Canada-based company. Sustained demand for cybersecurity and IoT products acted as a significant tailwind.
Bottom Line
On a GAAP basis, quarterly net income came in at $74 million or a loss of 5 cents per share against a net loss of $130 million or a loss of 23 cents per share in the prior-year quarter. Despite top-line contraction, the year-over-year improvement was primarily due to operating income in the reported quarter against operating loss of $127 million in the year-ago quarter.
Non-GAAP net loss was $1 million against net income of $9 million in the year-ago quarter. It reported breakeven on a per share basis compared with 2 cents per share in the prior year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
Revenues
Quarterly total revenues declined 15.6% year over year to $184 million. While revenues from Cyber Security aggregated $128 million, the same from IoT totaled $43 million. Licensing and Other contributed $13 million.
In the IoT business unit, the company is facing headwinds related to the global chip shortage. However, the segment showcased stronger-than-expected performance as a result of accretive design-related revenues in QNX business. This demonstrates BlackBerry’s industry leadership position and secular trends.
In Cyber Security, the company witnessed solid traction for the latest unified endpoint security product launches, fueled by back-to-back partnerships with major players in the market. The segment also delivered solid sequential billings and revenue growth.
Other Details
Gross profit declined to $117 million from $149 million in the year-ago quarter. Total operating expenses plunged to $66 million from $276 million. This was primarily due to a loss in the fair value adjustment of the convertible debentures. Operating income was $51 million against an operating loss of $127 million a year ago.
Cash Flow & Liquidity
In the first nine months of fiscal 2022, BlackBerry utilized $37 million of net cash in operating activities against $30 million generated in the year-ago period. As of Nov 30, 2021, the company had $271 million in cash and cash equivalents with $673 million of long-term debentures.
Q4 Outlook
BlackBerry has issued the segment outlook for fourth-quarter fiscal 2022. IoT revenues are estimated between $50 million and $55 million. Cyber Security business’ revenues are likely to be in the range of $125-$135 million. Licensing revenues are anticipated to be around $10 million for the quarter. However, the projection mark for Licensing segment might change as it is dependent on the sale of noncore portion of BlackBerry’s IP patent portfolio.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 16.67% due to these changes.
VGM Scores
At this time, BlackBerry has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise BlackBerry has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.