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sonbuster
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I'm fascinated about the market. It's completely unpredictable, at least for me it is - like a drama-filled soap opera that is on 6.5 hours a day, 5 days a week and still leaves you wondering what will happen next.
  • Why $0.25 EPS Is All I Want For Q1F2014 11 comments
    Jun 27, 2013 8:11 PM | about stocks: BBRY

    What's so significant about $0.25 EPS? Is it too much to ask for when the consensus estimate is $0.05-$0.07?

    Let's go back to Q4F2013...

    CEO Thorsten Heins said "We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the Company returning to profitability in the fourth quarter. Including the anticipated 50% sequential increase in marketing spending, the Company believes it will approach breakeven financial results in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins."

    Regarding the outlook for this quarter, the company said, "including the anticipated 50% sequential increase in marketing spending, the Company believes it will approach break-even financial results in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins."

    blogs.barrons.com/techtraderdaily/2013/0.../

    What does that mean to you? To me at the time, I thought it meant to break-even for Q1F2014. What confused me more was that BlackBerry registered $0.19 EPS on 1 million Z10 sales in Q4F2013. So how could you not break-even in Q1 with an expected 3-4 million Z10+Q10 sales?

    Perhaps Heins wasn't targeting an EPS break-even goal for Q1F2014, but rather for the company to break-even on the EPS TTM! Why $0.25 or maybe even $0.24? Let's look at the previous 3 quarters' EPS:

    http://www.theglobeandmail.com/globe-investor/markets/stocks/financials/?q=BB-T

    Q2F2013 = ($0.45)

    Q3F2013 = $0.02

    Q4F2013 = $0.19

    In order for the EPS TTM to reach break-even we would need $0.24, to be profitable we need $0.25.

    Why is a positive EPS TTM important? It could be important because there may still be a lot of money on the sidelines undecided about the next step. These monies belong to pension funds, mutual funds, 401(NYSE:K)s, and the retail public, and they may be governed by rules restricting them from investing in BlackBerry. With $0.25 EPS, BlackBerry will be officially profitable and out of the doghouse; hopefully by removing those restrictions, Blackberry could welcome new investors.

    In the long-term, BlackBerry is setting up quite nicely. With growing earnings and future growth prospects (new product launches with 6 in total this year, BBM multi-platform crossover and monetization via BBM Money, BBM Channels, BES10.1.1 implementation, and BB10/QNX licensing e.g. the most recent being with Garmin and their K2 system wardsauto.com/politics/garmin-official-n...), there's no where for BlackBerry to go, but up.

    Special thanks all my friends that I've had the honour of meeting while 'longing' BlackBerry. Not only are you guys a great team, but more importantly a great family. I also want to thank oneinfiniteloop for providing me the idea for writing this article. I am also greatly appreciative for the support and knowledge that I've received from the fine folks here at Seeking Alpha, from Stockhouse as well as Stocktwits. And thanks to BlackBerry support sites such as Crackberry.com, N4BB.com, blackberryos.com, rapidberry.net, nerdberry.net and many others. Thank you all. May we all be prosperous and successful in the future.

    Disclosure: I am long BBRY.

    Stocks: BBRY
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Comments (11)
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  • Lein
    , contributor
    Comments (69) | Send Message
     
    Thank you!!!
    27 Jun 2013, 08:27 PM Reply Like
  • eldon wilk
    , contributor
    Comments (90) | Send Message
     
    Interesting view. Makes sense with pension funds and such. Been long for a long while. So if it doesn't get there I will wait. Thanks for another piece of the puzzle.
    27 Jun 2013, 08:33 PM Reply Like
  • Infinity Group
    , contributor
    Comments (550) | Send Message
     
    Nice!
    27 Jun 2013, 09:07 PM Reply Like
  • voytekp
    , contributor
    Comments (77) | Send Message
     
    Very interesting approach @sonbuster! Thank you. All the best tomorrow!
    27 Jun 2013, 10:00 PM Reply Like
  • allstar0088
    , contributor
    Comments (312) | Send Message
     
    Good stuff.
    27 Jun 2013, 10:03 PM Reply Like
  • Tikay
    , contributor
    Comments (213) | Send Message
     
    Very nice sonbuster, great points. Never thought too much about the big mutual funds that may be on the verge of jumping in but they would definitely be a catalyst of pushing the stock price up if they stepped in and bought loads of shares.

     

    Just want to take this opportunity to say I really appreciate your research, top notch! I always look forward to checking out the great finds you bring to the Stock Talk table. Very glad you are part of our BBRY long team.

     

    Good luck tomorrow to all of us. Hopefully, will shall see the beginning of an indisputable, resounding Blackberry turnaround. Long BBRY!!!
    27 Jun 2013, 10:37 PM Reply Like
  • sonbuster
    , contributor
    Comments (93) | Send Message
     
    Author’s reply » Thanks Tikay and I am thankful for your contributions as well. I am grateful to serve this wonderful community.

     

    Long BBRY! Cheers :)
    27 Jun 2013, 10:52 PM Reply Like
  • jrettenmyer
    , contributor
    Comments (52) | Send Message
     
    Ditto appreciate your posts
    27 Jun 2013, 10:49 PM Reply Like
  • oneinfiniteloop
    , contributor
    Comments (663) | Send Message
     
    @sonbuster, you should have submitted this as an article on SA! As always, very insightful content. Glad to have had an opportunity to meet up with some very knowledgeable folks like yourself and many others on SA - it is amazing how much people are willing to share. Your gratitude is deeply appreciated - thanks for taking the time to write this instablog. Next time around it would be my pleasure to hopefully be the "first" to respond to your first article on SA!

     

    Tomorrow whatever happens - I am certain that it is a journey where we are in it together and that in by itself is a huge gain! Thank you my friend.
    28 Jun 2013, 12:52 AM Reply Like
  • Panoplos
    , contributor
    Comments (861) | Send Message
     
    The TTM connection is most likely coincidence. Did you run the numbers with your 3~4M BB10 sales, the increased SG&A and Opex used to ramp production of devices in the quarter that will not impact sales?

     

    I personally have a $0.25 EPS, but I have to admit it is most unlikely.
    28 Jun 2013, 01:33 AM Reply Like
  • Alive9Well
    , contributor
    Comments (52) | Send Message
     
    Very well timed, thank you. Of interest, BlackBerry chairperson Barbara Stymiest has very credible connections into large funds who are very likely watching the results and guidance to follow. There is more powering BlackBerry than Heins and Watsa.
    28 Jun 2013, 02:01 AM Reply Like
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