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BlackBerry's (BBRY) Q4 Loss Narrows, Revenues Fall Y/Y
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BlackBerry Limited posted fourth-quarter fiscal 2017 (ended Feb 28) loss (on an adjusted basis) of 1 cent per share, narrower than the Zacks Consensus Estimate loss of 4 cents per share and also the year-ago loss of 6 cents per share. Lower costs boosted the company’s bottom-line performance.
The investors seemed to be pleased with the company’s narrower-than-expected loss in the fiscal fourth quarter. Shares of the Zacks Rank # 3 (Hold) company gained significantly following the report. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Results in Detail
Total revenue in the reported quarter was $286 million, down 38.36% year over year. The top line also missed the Zacks Consensus Estimate of $294 million.
Segment-wise, Software and Services licensing generated approximately 64% of the revenues, while Mobility Solutions contributed 28%. Services access fees revenues accounted for the balance. Also, the company had more than 3,500 enterprise clients in the reported quarter.
Geographically, North America contributed 58% to the total revenue. Europe, the Middle East and Africa accounted for 29%. Similarly, the Latin America and the Asia-Pacific regions generated 1.8% and 11.2% of the total revenue, respectively, in the fiscalfourth quarter.
Quarterly operating loss (on a reported basis) came in at $57 million. The company had reported a loss of $223 million in the year-ago quarter. Further, operating expenses declined significantly on a year-over-year basis.
The company exited fiscal 2017 with cash and cash equivalents of $734 million compared with $957 million at the end of fiscal 2016. Long-term debt in fiscal fourth quarter is $591 million, as against $1.28 billion at the end of fiscal 2016.
Outlook
BlackBerry expects its software business to either outperform or at least perform at par with the overall market in fiscal 2018. In fact, the company anticipates profitability (on an adjusted basis) and also expects to generate positive free cash flow in fiscal 2018.
BlackBerry Limited Price, Consensus and EPS Surprise
The company has inked multiple deals of late. The deal with Giuliani Partners to combat cyber threats is encouraging. Also, we are optimistic on the agreement with Indian telecom enterprise, Optiemus Infracom Ltd.
BlackBerry signed another contract with Chinese handset manufacturer, TCL Communications, to produce BlackBerry handsets for certain countries globally. This move came on the back of an enhanced focus on software and licensing service amid increasing competition from peers such as Apple Inc. (AAPL - Free Report) and Nokia Inc. (NOK - Free Report) . Moreover, the company’s launch of DTEK60, manufactured by TCL and running on the Alphabet Inc. (GOOGL - Free Report) Android platform, is a positive.
We also note that BlackBerry’s decision to discontinue with internal hardware development and focus exclusively on its software manufacturing business is a prudent one. This is because declining smartphone sales had been hurting the company for quite some time.
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BlackBerry's (BBRY) Q4 Loss Narrows, Revenues Fall Y/Y
BlackBerry Limited posted fourth-quarter fiscal 2017 (ended Feb 28) loss (on an adjusted basis) of 1 cent per share, narrower than the Zacks Consensus Estimate loss of 4 cents per share and also the year-ago loss of 6 cents per share. Lower costs boosted the company’s bottom-line performance.
The investors seemed to be pleased with the company’s narrower-than-expected loss in the fiscal fourth quarter. Shares of the Zacks Rank # 3 (Hold) company gained significantly following the report. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Results in Detail
Total revenue in the reported quarter was $286 million, down 38.36% year over year. The top line also missed the Zacks Consensus Estimate of $294 million.
Segment-wise, Software and Services licensing generated approximately 64% of the revenues, while Mobility Solutions contributed 28%. Services access fees revenues accounted for the balance. Also, the company had more than 3,500 enterprise clients in the reported quarter.
Geographically, North America contributed 58% to the total revenue. Europe, the Middle East and Africa accounted for 29%. Similarly, the Latin America and the Asia-Pacific regions generated 1.8% and 11.2% of the total revenue, respectively, in the fiscalfourth quarter.
Quarterly operating loss (on a reported basis) came in at $57 million. The company had reported a loss of $223 million in the year-ago quarter. Further, operating expenses declined significantly on a year-over-year basis.
The company exited fiscal 2017 with cash and cash equivalents of $734 million compared with $957 million at the end of fiscal 2016. Long-term debt in fiscal fourth quarter is $591 million, as against $1.28 billion at the end of fiscal 2016.
Outlook
BlackBerry expects its software business to either outperform or at least perform at par with the overall market in fiscal 2018. In fact, the company anticipates profitability (on an adjusted basis) and also expects to generate positive free cash flow in fiscal 2018.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited Price, Consensus and EPS Surprise | BlackBerry Limited Quote
Our View
The company has inked multiple deals of late. The deal with Giuliani Partners to combat cyber threats is encouraging. Also, we are optimistic on the agreement with Indian telecom enterprise, Optiemus Infracom Ltd.
BlackBerry signed another contract with Chinese handset manufacturer, TCL Communications, to produce BlackBerry handsets for certain countries globally. This move came on the back of an enhanced focus on software and licensing service amid increasing competition from peers such as Apple Inc. (AAPL - Free Report) and Nokia Inc. (NOK - Free Report) . Moreover, the company’s launch of DTEK60, manufactured by TCL and running on the Alphabet Inc. (GOOGL - Free Report) Android platform, is a positive.
We also note that BlackBerry’s decision to discontinue with internal hardware development and focus exclusively on its software manufacturing business is a prudent one. This is because declining smartphone sales had been hurting the company for quite some time.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>