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BlackBerry (BB) Swings to Loss in Q3, Revenues Fall Y/Y
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BlackBerry Limited (BB - Free Report) reported tepid third-quarter fiscal 2023 (ended Nov 30, 2022) results, with the top line contracting year over year. Nonetheless, accretive design wins and partnerships with major players bode well for the Canada-based company. The sustained demand for IoT products is a significant tailwind.
The company reported an adjusted loss per share of 5 cents against the prior-year quarter’s breakeven earnings per share. The Zacks Consensus Estimate was pegged at a loss of 7 cents per share. Quarterly total revenues declined 8.2% year over year to $169 million.
Following the earnings announcement, shares of BlackBerry were down in pre-market trading on Dec 21 as investors probably expected a healthy top-line growth.
BlackBerry Limited Price, Consensus and EPS Surprise
Revenues from Cyber Security totaled $106 million, down 17.2% year over year. Revenues from IoT totaled $51 million, up 19% year over year. Licensing and Other contributed $12 million, down from $13 million a year ago.
Software and Services revenue declined 8.2% year over year to $157 million.
In the IoT business unit, the company’s QNX platform secured nine new design wins in Auto and 15 in the General Embedded Market.
In the fiscal third quarter, the company announced the expansion of its BlackBerry SecuSUITE partner network in the Asia Pacific by adding three new highly-specialized companies. The expansion will assist businesses and governments in more efficiently securing mobile communications and safeguarding people and operations.
Within the auto sector, increasing consolidation of digital cockpits augurs well for BlackBerry. In the reported quarter, the company announced a collaboration with Shanghai Dayin Technology to develop BlackBerry’s QNX acoustics technology that will power the intelligent cockpit for Jiayu Technology and will be deployed in Great Wall Motors’ premium WEY Mocha, Latte and Macchiato vehicle lines.
The company also announced that it is launching Cyber Threat Intelligence in December 2022. The product provides its users with professional threat intelligence services to tackle cyber threats.
In addition, it announced an extension of its use of Amazon Web Services to further develop its QNX technology. The company’s QNX technology will be available in the cloud for developers and will aid them in accelerating the time-to-market for mission-critical embedded systems.
Other Details
Gross profit decreased 6.8% from the year-ago quarter to $109 million. The gross margin improved marginally to 64.5% from 63.6%.
Total non-GAAP operating expenses were $137 million. The adjusted operating loss was $28 million compared with an adjusted operating loss of $24 million a year ago. Adjusted EBITDA loss came in at $22 million compared with an adjusted EBITDA loss of $8 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the quarter under review, BlackBerry utilized $185 million of net cash in operating activities. For the nine months ended Nov 30, 2022, BlackBerry utilized $253 million of net cash in operating activities compared with $37 million in the prior year period.
As of Nov 30, 2022, BlackBerry had $255 million in cash and cash equivalents.
Outlook
For fiscal 2023, BlackBerry expects IoT revenues in the range of $205-$210 million, indicating 15-18% growth year over year. Cyber business billings growth is expected within 8-12% due to increased uptake of security products.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 11.1% in the past year.
The Zacks Consensus Estimate for Plexus 2023 earnings is pegged at $5.98 per share, rising 8.9% in the past 60 days.
Plexus’ earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 17.5%. Shares of PLXS have gained 11.3% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.58 per share, rising 19.8% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 9.4%. Shares of SMCI have soared 83.6% in the past year.
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BlackBerry (BB) Swings to Loss in Q3, Revenues Fall Y/Y
BlackBerry Limited (BB - Free Report) reported tepid third-quarter fiscal 2023 (ended Nov 30, 2022) results, with the top line contracting year over year. Nonetheless, accretive design wins and partnerships with major players bode well for the Canada-based company. The sustained demand for IoT products is a significant tailwind.
The company reported an adjusted loss per share of 5 cents against the prior-year quarter’s breakeven earnings per share. The Zacks Consensus Estimate was pegged at a loss of 7 cents per share. Quarterly total revenues declined 8.2% year over year to $169 million.
Following the earnings announcement, shares of BlackBerry were down in pre-market trading on Dec 21 as investors probably expected a healthy top-line growth.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
Quarter in Details
Revenues from Cyber Security totaled $106 million, down 17.2% year over year. Revenues from IoT totaled $51 million, up 19% year over year. Licensing and Other contributed $12 million, down from $13 million a year ago.
Software and Services revenue declined 8.2% year over year to $157 million.
In the IoT business unit, the company’s QNX platform secured nine new design wins in Auto and 15 in the General Embedded Market.
In the fiscal third quarter, the company announced the expansion of its BlackBerry SecuSUITE partner network in the Asia Pacific by adding three new highly-specialized companies. The expansion will assist businesses and governments in more efficiently securing mobile communications and safeguarding people and operations.
Within the auto sector, increasing consolidation of digital cockpits augurs well for BlackBerry. In the reported quarter, the company announced a collaboration with Shanghai Dayin Technology to develop BlackBerry’s QNX acoustics technology that will power the intelligent cockpit for Jiayu Technology and will be deployed in Great Wall Motors’ premium WEY Mocha, Latte and Macchiato vehicle lines.
The company also announced that it is launching Cyber Threat Intelligence in December 2022. The product provides its users with professional threat intelligence services to tackle cyber threats.
In addition, it announced an extension of its use of Amazon Web Services to further develop its QNX technology. The company’s QNX technology will be available in the cloud for developers and will aid them in accelerating the time-to-market for mission-critical embedded systems.
Other Details
Gross profit decreased 6.8% from the year-ago quarter to $109 million. The gross margin improved marginally to 64.5% from 63.6%.
Total non-GAAP operating expenses were $137 million. The adjusted operating loss was $28 million compared with an adjusted operating loss of $24 million a year ago. Adjusted EBITDA loss came in at $22 million compared with an adjusted EBITDA loss of $8 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the quarter under review, BlackBerry utilized $185 million of net cash in operating activities. For the nine months ended Nov 30, 2022, BlackBerry utilized $253 million of net cash in operating activities compared with $37 million in the prior year period.
As of Nov 30, 2022, BlackBerry had $255 million in cash and cash equivalents.
Outlook
For fiscal 2023, BlackBerry expects IoT revenues in the range of $205-$210 million, indicating 15-18% growth year over year. Cyber business billings growth is expected within 8-12% due to increased uptake of security products.
Zacks Rank & Stocks to Consider
BlackBerry currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Plexus (PLXS - Free Report) and Super Micro Computer (SMCI - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 11.1% in the past year.
The Zacks Consensus Estimate for Plexus 2023 earnings is pegged at $5.98 per share, rising 8.9% in the past 60 days.
Plexus’ earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 17.5%. Shares of PLXS have gained 11.3% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.58 per share, rising 19.8% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 9.4%. Shares of SMCI have soared 83.6% in the past year.