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BlackBerry (BBRY) Incurs Narrower-Than-Expected Q2 Loss
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Canadian handset manufacturer BlackBerry Limited reported narrower-than-expected loss for second-quarter fiscal 2017 (ended Aug 31, 2016), whereas its top line missed the Zacks Consensus Estimate. Nonetheless, revenues at the software and services segment improved 89% year over year (on a reported basis) in the quarter under review.
Results in Detail
BlackBerry suffered a loss of 71 cents per share (on a reported basis) in the second quarter compared with a loss of 34 cents per share in the year-ago quarter. However, adjusted loss per share of 3 cents was narrower than the Zacks Consensus Estimate of a loss of 10 cents.
Total revenue in the reported quarter was $352 million, down 28.2% year over year. Moreover, the top line missed the Zacks Consensus Estimate of $390.7 million. Segment-wise, Mobility solutions revenues contributed approximately 30%, Services access fees revenues accounted for 26% while 44% came from software and services. The company also won 3,000 enterprise clients in the reported quarter.
Geographically, North America contributed 56.9% to the total revenue of $334 million (on a reported basis), while Europe, the Middle East and Africa accounted for 29.9%. Similarly, Latin America and the Asia Pacific contributed 3.9% and 9.3%, respectively, to the top line in the quarter.
The company exited the quarter with cash, cash equivalents, short-term and long-term investments of approximately $2.5 billion as against approximately $2.6 billion at the end of fiscal 2016. The company’s balance sheet at the end of the quarter was free of long-term debt. The company said that it has completed the previously announced convertible debt restructuring program, thereby reducing interest costs among other things.
BlackBerry is on track to achieve 30% growth in software and service revenue. The company expects the bottom line in the range of $0.00 to -$0.05 per share in fiscal 2017. The earlier outlook had hinted at a loss of $0.15 per share.
The company intends to end all internal hardware development and outsource the same to its partners. Earlier in the year, BlackBerry had announced its decision to discontinue the production of the BlackBerry Classic smartphone. The decision is not surprising as Apple Inc.’s (AAPL - Free Report) iPhone and Alphabet Inc.’s (GOOGL - Free Report) Android-powered touchscreen smartphones have gained immense popularity among consumers in recent years.
Zacks Rank & a Key Pick
BlackBerry carries a Zacks Rank #3 (Hold). A better-ranked stock in the broader computer & technology sector is Asure Software Inc. (ASUR - Free Report) . The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Asure Software has seen the Zacks Consensus Estimate for 2016 increase by 26.7% to 19 cents per share over the last 30 days.
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BlackBerry (BBRY) Incurs Narrower-Than-Expected Q2 Loss
Canadian handset manufacturer BlackBerry Limited reported narrower-than-expected loss for second-quarter fiscal 2017 (ended Aug 31, 2016), whereas its top line missed the Zacks Consensus Estimate. Nonetheless, revenues at the software and services segment improved 89% year over year (on a reported basis) in the quarter under review.
Results in Detail
BlackBerry suffered a loss of 71 cents per share (on a reported basis) in the second quarter compared with a loss of 34 cents per share in the year-ago quarter. However, adjusted loss per share of 3 cents was narrower than the Zacks Consensus Estimate of a loss of 10 cents.
Total revenue in the reported quarter was $352 million, down 28.2% year over year. Moreover, the top line missed the Zacks Consensus Estimate of $390.7 million. Segment-wise, Mobility solutions revenues contributed approximately 30%, Services access fees revenues accounted for 26% while 44% came from software and services. The company also won 3,000 enterprise clients in the reported quarter.
Geographically, North America contributed 56.9% to the total revenue of $334 million (on a reported basis), while Europe, the Middle East and Africa accounted for 29.9%. Similarly, Latin America and the Asia Pacific contributed 3.9% and 9.3%, respectively, to the top line in the quarter.
The company exited the quarter with cash, cash equivalents, short-term and long-term investments of approximately $2.5 billion as against approximately $2.6 billion at the end of fiscal 2016. The company’s balance sheet at the end of the quarter was free of long-term debt. The company said that it has completed the previously announced convertible debt restructuring program, thereby reducing interest costs among other things.
BLACKBERRY LTD Price, Consensus and EPS Surprise
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BlackBerry is on track to achieve 30% growth in software and service revenue. The company expects the bottom line in the range of $0.00 to -$0.05 per share in fiscal 2017. The earlier outlook had hinted at a loss of $0.15 per share.
The company intends to end all internal hardware development and outsource the same to its partners. Earlier in the year, BlackBerry had announced its decision to discontinue the production of the BlackBerry Classic smartphone. The decision is not surprising as Apple Inc.’s (AAPL - Free Report) iPhone and Alphabet Inc.’s (GOOGL - Free Report) Android-powered touchscreen smartphones have gained immense popularity among consumers in recent years.
Zacks Rank & a Key Pick
BlackBerry carries a Zacks Rank #3 (Hold). A better-ranked stock in the broader computer & technology sector is Asure Software Inc. (ASUR - Free Report) . The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Asure Software has seen the Zacks Consensus Estimate for 2016 increase by 26.7% to 19 cents per share over the last 30 days.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>