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Why Is BlackBerry (BB) Down 5.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for BlackBerry (BB - Free Report) . Shares have lost about 5.3% 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 catalysts.
BlackBerry Q3 Earnings Rise Y/Y
BlackBerry reported third-quarter fiscal 2024 (ended Nov 30) adjusted earnings per share (EPS) of 1 cent. In the prior-year quarter, it incurred a non-GAAP loss of 5 cents. The Zacks Consensus Estimate was pegged at a loss of 1 cent.
Quarterly total revenues were $175 million compared with the prior-quarter revenues of $169 million. The company’s revenues missed the Zacks Consensus Estimate by 12.2%. Revenues benefited from solid demand for its solution across the advanced driver assistance systems market.
The company expects fiscal fourth-quarter total revenues in the range of $150-$159 million. For the Cybersecurity business, revenues are estimated to be in the range of $83-$88 million for the fiscal fourth quarter. The company expects revenues to be affected due to the reassessment of the likelihood, size, and timing of some of the large government deals.
For the Internet of Things (IoT) business, revenues are now projected to be in the band of $62-$66 million. The company expects the UAW labor disputes to hamper production volumes for some of its largest customers. Licensing & Other revenues are expected to be approximately $5 million.
Quarter in Details
Revenues from the Cybersecurity business totaled $114 million, up 8% year over year. Revenues were driven by securing large strategic deals with leading government agencies.
Revenues from the IoT business totaled $55 million, up 8% year over year.
Licensing and Other contributed $6 million, down from $12 million a year ago.
Other Details
Gross profit increased 16.5% from the year-ago quarter to $127 million. Gross margin improved to 72.5% from 64.5% reported in the prior-year quarter.
However, non-GAAP gross margin increased 900 basis points to 73% on a year-over-year basis.
Total non-GAAP operating expenses were $115 million, down 16.1%. Adjusted operating income was $13 million compared with $28 million a year ago.
Adjusted EBITDA came in at $18 million against an adjusted EBITDA loss of $22 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the nine months ended Nov 30, 2023, BlackBerry generated $12 million of net cash in operating activities against $253 million of cash used in the comparable period in fiscal 2023.
As of Nov 30, 2023, BlackBerry had $210 million in cash and cash equivalents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -600% due to these changes.
VGM Scores
At this time, BlackBerry has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise BlackBerry has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
BlackBerry is part of the Zacks Computer - Software industry. Over the past month, Oracle (ORCL - Free Report) , a stock from the same industry, has gained 2.7%. The company reported its results for the quarter ended November 2023 more than a month ago.
Oracle reported revenues of $12.94 billion in the last reported quarter, representing a year-over-year change of +5.4%. EPS of $1.34 for the same period compares with $1.21 a year ago.
For the current quarter, Oracle is expected to post earnings of $1.37 per share, indicating a change of +12.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Oracle. Also, the stock has a VGM Score of F.
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Why Is BlackBerry (BB) Down 5.3% Since Last Earnings Report?
A month has gone by since the last earnings report for BlackBerry (BB - Free Report) . Shares have lost about 5.3% 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 catalysts.
BlackBerry Q3 Earnings Rise Y/Y
BlackBerry reported third-quarter fiscal 2024 (ended Nov 30) adjusted earnings per share (EPS) of 1 cent. In the prior-year quarter, it incurred a non-GAAP loss of 5 cents. The Zacks Consensus Estimate was pegged at a loss of 1 cent.
Quarterly total revenues were $175 million compared with the prior-quarter revenues of $169 million. The company’s revenues missed the Zacks Consensus Estimate by 12.2%. Revenues benefited from solid demand for its solution across the advanced driver assistance systems market.
The company expects fiscal fourth-quarter total revenues in the range of $150-$159 million. For the Cybersecurity business, revenues are estimated to be in the range of $83-$88 million for the fiscal fourth quarter. The company expects revenues to be affected due to the reassessment of the likelihood, size, and timing of some of the large government deals.
For the Internet of Things (IoT) business, revenues are now projected to be in the band of $62-$66 million. The company expects the UAW labor disputes to hamper production volumes for some of its largest customers. Licensing & Other revenues are expected to be approximately $5 million.
Quarter in Details
Revenues from the Cybersecurity business totaled $114 million, up 8% year over year. Revenues were driven by securing large strategic deals with leading government agencies.
Revenues from the IoT business totaled $55 million, up 8% year over year.
Licensing and Other contributed $6 million, down from $12 million a year ago.
Other Details
Gross profit increased 16.5% from the year-ago quarter to $127 million. Gross margin improved to 72.5% from 64.5% reported in the prior-year quarter.
However, non-GAAP gross margin increased 900 basis points to 73% on a year-over-year basis.
Total non-GAAP operating expenses were $115 million, down 16.1%. Adjusted operating income was $13 million compared with $28 million a year ago.
Adjusted EBITDA came in at $18 million against an adjusted EBITDA loss of $22 million reported in the year-ago quarter.
Cash Flow & Liquidity
For the nine months ended Nov 30, 2023, BlackBerry generated $12 million of net cash in operating activities against $253 million of cash used in the comparable period in fiscal 2023.
As of Nov 30, 2023, BlackBerry had $210 million in cash and cash equivalents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -600% due to these changes.
VGM Scores
At this time, BlackBerry has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise BlackBerry has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
BlackBerry is part of the Zacks Computer - Software industry. Over the past month, Oracle (ORCL - Free Report) , a stock from the same industry, has gained 2.7%. The company reported its results for the quarter ended November 2023 more than a month ago.
Oracle reported revenues of $12.94 billion in the last reported quarter, representing a year-over-year change of +5.4%. EPS of $1.34 for the same period compares with $1.21 a year ago.
For the current quarter, Oracle is expected to post earnings of $1.37 per share, indicating a change of +12.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Oracle. Also, the stock has a VGM Score of F.