Back to top

Image: Bigstock

What's in the Cards for BlackBerry (BB) in Q4 Earnings?

Read MoreHide Full Article

BlackBerry Limited (BB - Free Report) is slated to release fourth-quarter fiscal 2018 results on Mar 28, before the market opens.

Last quarter, the company delivered a positive earnings surprise of 400%. Its earnings per share (excluding 55 cents from non-recurring items) of 3 cents compared favorably with the Zacks Consensus Estimate of a loss of a penny. Moreover, the bottom line improved 50% year over year. Results were boosted by robust software sales while total adjusted revenues came in at $235 million. The consensus mark for the metric was pegged at $216 million.

Let’s see how things shape up for this announcement.

Factors Likely at Play

The unfavorable verdict in the Nokia case is likely to hurt results in the fourth quarter of fiscal 2018. Notably, last December, BlackBerry had to shell out $137 million to Nokia as a result of losing a payment dispute with it. These charges might further hamper the company’s bottom line.

Moreover, on the conference call of the fiscal third quarter, BlackBerry stated that operating expenses are likely to rise in the quarter to be reported than what was incurred in the previous quarter. Increased investments in sales and marketing have led to this forecast. High operating expenses will also affect the bottom line in the period.

Additionally, BlackBerry faces the risk of adverse foreign exchange fluctuations with escalated global exposure. This apart, high-debt levels might hit results in the fiscal fourth quarter.

However, robust software sales and growth of cybersecurity business are expected to aid the company’s results.

The company’s multiple deals in the recent past also raise optimism about the stock. Notably, its automotive deals with Baidu Inc. (BIDU - Free Report) and Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated (QCOM - Free Report) are anticipated to boost results.

The company’s partnership with Baidu is aimed at expediting the deployment of connected and autonomous vehicle technology for automotive OEMs and suppliers across the world. While its agreement with Qualcomm Technologies conforms to collaboration and development of groundbreaking automotive platforms for next-generation connected vehicles.

BlackBerry Limited Price and EPS Surprise

 

BlackBerry Limited Price and EPS Surprise | BlackBerry Limited Quote


Earnings Whispers

Our quantitative model does not show conclusively that BlackBerry is likely to beat on earnings in the fiscal fourth quarter because a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. However, that is not the case as highlighted below.

Zacks ESP: BlackBerry has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BlackBerry carries a Zacks Rank of 3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes our surprise prediction difficult.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement.

Key Pick

Investors interested in the broader Computer and Technology sector may consider Intel Corporation (INTC - Free Report) as our model shows that the stock possesses the right combination of elements to beat estimates in its next release.

Intel has an Earnings ESP of +2.32% and a Zacks Rank #1 (Strong Buy). The company’s impressive earnings history reflects positive surprises in each of the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Published in