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  • BlackBerry Q4: One Million Phone Order Could Impact Earnings Report On Thursday 5 comments
    Mar 26, 2013 3:36 AM | about stocks: BBRY, VZ

    Disclaimer: I have decided to put this out in a blog, as the contents of this article are very speculative. Use this information at your own risk! These views are only my thoughts and opinions.

    Recently, it was reported that the mystery customer of the one million BlackBerry (BBRY) Z10 order was Brightstar (a wireless distribution and services company). News of this transaction was released on March 13, 2013.

    One thing that I noticed with the reports coming out about Brightstar, is the assumption that the one million phone order is entirely for Verizon (VZ). In looking into Brightstar, it has occurred to me that this is potentially false.

    Brightstar is a global player in wireless distribution. Verizon is only one of 200+ customers for Brightstar. If Verizon is not the only customer of Brightstar, then who else could be part of the one million phone order? Is there a potential for this sale to hit the Q4 earnings report this Thursday?

    To do this, I have compiled the following two lists:

    Countries with Q4 Z10 Sales (prior to March 2nd):

    Countries with Q4 sales served by Brightstar:

    • United Kingdom
    • Canada
    • United Arab Emirates
    • South Africa
    • Nigeria
    • Germany
    • Spain
    • Netherlands

    As you can see, the two lists are very similar. Eight of the eleven countries that had Z10 sales in Q4 are served by Brightstar.

    So, the question must be raised... was this one million phone order BEFORE March 2nd? We were told about this transaction on March 13th. We were also not originally told who the order was for. Due to the secretive nature of the original reports, it would not surprise me if this one million phone order was on the Q4 earnings report this Thursday. If BlackBerry shipped these units by March 2nd, then generally accepted accounting principles (GAAP) would allow them to report the full one million as revenue in Q4.

    This again is purely speculative. I wanted to bring this up, as not one report has mentioned that this order could be for more than just Verizon business. For the full order of one million phones to be on Q4, all would had to have been shipped before March 2nd. We would have to also assume that when we heard about this transaction (March 13th), that it was given to us very late.

    Please feel free to point out any errors or omissions I may have made. The information in this article was based on what I could piece together from various news sources.

    There are a lot of assumptions to be made for a case like this. Then again, this is what speculating is all about. This also makes it a lot of fun. No matter what your position is in BlackBerry, good fortune to you on Thursday!

    Disclosure: I am long BBRY.

    Additional disclosure: Information provided is my opinion. Use this information at your own risk.

    Themes: Technology Stocks: BBRY, VZ
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Comments (5)
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  • For the order to be shipped by the 2nd March, it would have to be received much earlier, say early to mid February. Why announce a month late and also during the middle of the trading. Day.
    26 Mar 2013, 07:45 AM Reply Like
  • I doubt that BlackBerry had a million phones available to ship before March 2nd.

     

    Jefferies analyst Peter Misek (one of the bulls), estimates that BlackBerry was initially making 1 million phones per month and has increased production to 2 million. A production increase of that size is not readily acheived overnight.

     

    It is more likely that Brightstar, seeing the demand, has placed the big order to get itself to the head of the line for the limited supply. I think AT&T had trouble getting a big enough supply of phones, so they didn't do much in the way of promotion. I expect to see a much better effort from Verizon on Thursday.
    26 Mar 2013, 09:58 AM Reply Like
  • Author’s reply » It was announced just before the release of Samsung's phone. Since the bears are trading the news, I believe they want to wait for Q4 to make it official.
    26 Mar 2013, 09:59 AM Reply Like
  • Author’s reply » One knock against this theory is that March 13th just happens to be the same day that the Z10 was released in Indonesia. The distributor may have made the order the same day that we first heard about it, so no impact on Q4. Thought I was on to something.
    26 Mar 2013, 04:46 PM Reply Like
  • Hi Chattyintrovert, thanks for sharing your article. I think the 1M order would be counted for Q1F2014.

     

    on the "bright side", the 1M order is the largest single order BlackBerry has ever received. even in their glory days its largest order was about 750K to ATT. if you put that in perspective from where BlackBerry is now to where BlackBerry was then, 1M is an outstanding number.

     

    further to Jaberwock, if the buyer was Brightstar, they must have seen compelling numbers in Feb to place a 1M unit order. what number did they see? we'll find out on Thursday. :)
    26 Mar 2013, 07:50 PM Reply Like
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