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BlackBerry (BB) to Report Q1 Earnings: What's in the Cards?

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BlackBerry Limited (BB - Free Report) is scheduled to report first-quarter fiscal 2021 results (ended May 31, 2020) on Jun 24, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 125%. The bottom line beat the Zacks Consensus Estimate by 5 cents.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

The cybersecurity software and services company continued to invest in product development and go-to-market strategy to drive long-term sustainable growth. During the quarter under review, BlackBerry made new enhancements and feature updates to SecuSUITE for Government and BlackBerry AtHoc that enable government agencies to securely communicate and safeguard sensitive data. Also, the company made improvements to the BlackBerry Cylance North America Partner Program focused on partner protection, enhanced margins, incumbency with renewals and sustained enablement.

The German Development Agency, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, selected BlackBerry AtHoc as its emergency mass notification system. ZTR, a market leader in delivering innovative locomotive modernization solutions, and BlackBerry combined their proven technical expertise to offer railcar owners, operators and suppliers a powerful new digital monitoring solution. BlackBerry’s performance is likely to have somewhat benefited from these developments in the to-be-reported quarter.

The company launched QNX Black Channel Communications Technology, a new software solution that OEMs and embedded software developers can use to ensure safe data communication exchanges within their safety-critical systems. BlackBerry Radar continued to grow its distribution reach with more than 12 new channel partners have signed on in the past six months including two within Mexico. This expanded the company’s monitoring solutions outside of the United States and Canada for the first time.

BlackBerry Government Mobility Suite, a cloud-based endpoint management solution developed specifically for U.S. government agencies, achieved the Federal Risk and Authorization Management Program (FedRAMP) authorization. The company launched BlackBerry Spark Suites, offering enterprises a range of tailored cybersecurity and endpoint management options to help protect data, minimize risk, and reduce cost and complexity.

Despite all these positive factors, the company’s revenues are likely to have been impacted by the slowdown in the auto industry supply chain due to the pandemic. For the fiscal first quarter, the Zacks Consensus Estimate for adjusted loss per share is pegged at 2 cents. This indicates a plunge of 300% from the year-ago quarter’s reported figure.

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 2 cents.

BlackBerry Limited Price and EPS Surprise

Zacks Rank: BlackBerry currently carries a Zacks Rank #2.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

SYNNEX Corporation (SNX - Free Report) is slated to release second-quarter fiscal 2020 results on Jun 25. It has an Earnings ESP of +6.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enerpac Tool Group Corp. (EPAC - Free Report) is scheduled to release third-quarter fiscal 2020 results on Jun 25. The company has an Earnings ESP of +36.17% and a Zacks Rank #2.

McCormick & Company, Incorporated (MKC - Free Report) has an Earnings ESP of +4.57% and a Zacks Rank of 3. The company is set to report second-quarter fiscal 2020 results on Jun 25.

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