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What's in the Offing for BlackBerry (BB) in Q2 Earnings?

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BlackBerry Limited (BB - Free Report) is set to report second-quarter fiscal 2022 (ended Aug 31, 2021) results on Sep 22, after the closing bell. In the last reported quarter, the company’s adjusted loss per share was narrower than the Zacks Consensus Estimate of a loss of 6 cents. It pulled off a trailing four-quarter earnings surprise of 329.2%, on average.

This Canada-based company continues to invest in product development and go-to-market strategy to drive long-term sustainable growth. With healthy momentum across BlackBerry IVY and strong pipeline growth for Unified Endpoint Security products, it aims to tap lucrative market opportunities across IoT and cybersecurity.

Despite global chip shortage woes, the company’s auto business continues to perform impressively. Further, it is witnessing significant progress in the Spark and QNX businesses with the number of QNX software-incorporated vehicles increasing to more than 195 million. BlackBerry QNX is the market leader for safety-certified embedded software in automotive. Strong growth in royalty revenue backlog is another major tailwind.

Factors at Play

During the quarter under review, BlackBerry collaborated with BiTECH Automotive (Wuhu) Co., Ltd — a China-based automotive parts manufacturer — to offer a digital LCD instrument cluster for a more personalized driving experience. The product has been used for the mass production of a new SUV dubbed UNI-K, manufactured by Changan Automobile. The operating system of these models is run by BlackBerry QNX Neutrino real-time operating system.

The company launched BlackBerry IVY Advisory Council to boost high-impact technology use cases and solutions that leverage in-vehicle data on the back of BlackBerry IVY platform. The BlackBerry IVY Advisory Council consists of members such as TELUS Corporation (TU - Free Report) , Amazon, Cerence Inc. (CRNC - Free Report) , HERE Technologies and GEICO.

In the quarter, it also unveiled its flagship software composition analysis tool, BlackBerry Jarvis 2.0, to address the increasing cybersecurity threats among multi-tiered software supply chains within the automotive, medical, and aerospace industries.

In addition, BlackBerry joined forces with a leading South Korea-based solution developer for transportation infrastructure systems, sTraffic, to deploy its QNX OS for Safety platform across the latter’s Communications-based Train Control System. It launched a first-of-its-kind flood risk and clean water monitoring solution based on BlackBerry AtHoc platform.

The company partnered with California-based financial technology solution provider, Car IQ, to unveil a vehicle-based payment solution that will aid automakers to offer a plethora of payment services and develop previously untapped revenue streams. The innovative solution will be backed by the BlackBerry IVY platform. The move is likely to unlock a connected car payments market that is estimated to reach more than €530 billion by 2030.

BlackBerry also teamed up with Nobo Technologies to power Great Wall Motors’ next-gen SUV, Haval H6S, with the advanced digital cockpit controller platform built on the BlackBerry QNX Neutrino Realtime Operating System and QNX Hypervisor. Such developments are expected to have had a positive impact on BlackBerry’s top line.

The Zacks Consensus Estimate is pegged at a loss of 6 cents per share, which suggests a drastic decline from earnings of 11 cents reported in the year-ago quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for BlackBerry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: BlackBerry’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at a loss of 6 cents.

BlackBerry Limited Price and EPS Surprise

BlackBerry Limited Price and EPS Surprise

BlackBerry Limited price-eps-surprise | BlackBerry Limited Quote

Zacks Rank: BlackBerry currently has a Zacks Rank #3.

Stock to Consider

Here is a company that you may want to consider as our model shows that this has the right combination of elements to post an earnings beat this time around.

Costco Wholesale Corporation (COST - Free Report) is slated to release fourth-quarter fiscal 2021 results on Sep 23. It has an Earnings ESP of +0.11% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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