BlackBerry adds to losses; two downgrades overshadow upgrade


While Needham has upgraded BlackBerry (BBRY -4.3%) to Hold, Credit Suisse and Evercore have respectively downgraded to Underperform and Underweight. Shares are now down 11% since Friday morning's FQ4 report, as top-line concerns take precedence over a big EPS beat.

CS is worried about free cash flow weakness and slumping services revenue. Needham, meanwhile, declares John Chen has "brought adult supervision to the company," and is optimistic about installed base upgrades following the launch of the company's Q20/Classic QWERTY phone this year.

Canaccord (Hold) has upped its PT to $8 from $6. It's concerned about limited near-term sales visibility, but also expects "gradually improving trends following the BES12 launch in November."

Goldman (Neutral) has cut its PT to $8.80 from $9.50. It views Chen's goal of achieving breakeven cash flow by the end of FY15 achievable, but is "more skeptical on BlackBerry's ability to return to profitability in FY16."

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Comments (15)
  • samuel_liu
    , contributor
    Comments (2753) | Send Message
     
    is depressing ...
    31 Mar 2014, 10:23 AM Reply Like
  • ELLAS
    , contributor
    Comments (2699) | Send Message
     
    Without short term pain, there won't be any gain. Restructuring has been progressing as scheduled. BlackBerry even accelerated it's goals by a full quarter.

     

    I believe the next quarter will show a lot more positive growth, with the introduction to the Z3 device along with solid sales of Z10 and Z30 in markets other than North America, which have picked up steam via price cuts and incentives.

     

    I can also see a BBM user base increase, now that BBM will be pre - installed on various Android devices.
    31 Mar 2014, 10:24 AM Reply Like
  • Chris Lau
    , contributor
    Comments (3878) | Send Message
     
    Can't hear you past the noise of 113M BBM users on 85M MAU, Goldman (GS). The average BBM user also reads 11.5 posts per day.

     

    Quarter-end dump. Can't be seen holding (BBRY). Look for nice bounce tomorrow, even though this is a buy and forget, not a day trading play.
    31 Mar 2014, 10:39 AM Reply Like
  • KIA Investment Research
    , contributor
    Comments (12949) | Send Message
     
    "even though this is a buy and forget"

     

    Worst advice ever.
    31 Mar 2014, 02:30 PM Reply Like
  • sfinvestor
    , contributor
    Comments (1846) | Send Message
     
    "even though this is a buy and forget"

     

    We'll just buy it and forget that the 40% year over year declines never happened or will happen. It's as simple as slapping hope of "classic", "BES12", and "Jakarta"

     

    Why don't we just cut to the chase and annouce "BES 14", "legendary" and "cape town" while we are at it so we can hand if off to our kids in a blind trust.
    31 Mar 2014, 04:32 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (2676) | Send Message
     
    @ Mr Knowitall,

     

    "Worse advice ever".

     

    Not by a long shot. How about all those day traders that advised to sell BlackBerry back in December and lost an 80% move higher? Chris's advice has merit. IMHO...:)
    31 Mar 2014, 05:53 PM Reply Like
  • Cochise54
    , contributor
    Comments (425) | Send Message
     
    Charge ahead! Onward, through the fog! Sir, may I have another?
    31 Mar 2014, 11:32 AM Reply Like
  • Flog
    , contributor
    Comments (214) | Send Message
     
    STOP looking at Analysts that downgrade this stock! JC originally said it would take a few quarters to turn BBRY to positive. He almost did it in 1 QTR!!!. JC deserves to get credit for what he has achieved to date and shareholders that hold will be GREATLY rewarded! Long BBRY!!!
    31 Mar 2014, 12:14 PM Reply Like
  • Energysystems
    , contributor
    Comments (2042) | Send Message
     
    I fail to see how revs down 18% QoQ "almost positive". Anyone can announce layoffs and sell real estate, but bringing back a dead platform(QWERTY), that's just great lol
    31 Mar 2014, 05:11 PM Reply Like
  • ELLAS
    , contributor
    Comments (2699) | Send Message
     
    Energysystems

     

    If you do not know the answer to your own question, then you haven't studied BlackBerry's past and present affairs.
    Ask those +25M current BOLD users why they continue to use the QWERTY Keyboard. John Chen is trying to tap into that niche while still pushing forward Full Touch devices such as the upcoming Z50.
    31 Mar 2014, 05:38 PM Reply Like
  • Energysystems
    , contributor
    Comments (2042) | Send Message
     
    Wow, 25 million. Is that number supposed to impress ANYONE?
    2 Apr 2014, 09:22 AM Reply Like
  • KIA Investment Research
    , contributor
    Comments (12949) | Send Message
     
    well, those 25 million certainly weren't impressed with the Q10.

     

    Think about that for a minute.

     

    You have an aging BB Bold and BlackBerry comes out with a brand new QWERTY smartphone powered by it's much ballyhooed BB10.

     

    They took a look and said "no thank you."
    2 Apr 2014, 02:45 PM Reply Like
  • supermvpig
    , contributor
    Comments (3) | Send Message
     
    institutions ..... Never listen to institution, they are backward looking.
    31 Mar 2014, 12:44 PM Reply Like
  • 10553331
    , contributor
    Comments (115) | Send Message
     
    All this just goes to show that this is a highly speculative investment. I do believe that recovery of the company was impeded by so many analysts being hyper critical of BB products, with no real understanding of what their capabilities are. These analyses inappropriately do influence buyers and IT departments. Perhaps things are changing in the media. I saw a couple actual reviews where former bashers have had a change of heart after actually trying out a product and now rate the Z30 on par with other flagship smartphones. Whether this will catch on or not is the question. These positive reviews in mainstream media as well as the DOD approval of the BES 10 and BB device pair will help, but it's like starting a fire with only a couple sticks. Marines can do it, but most people can't. Is John Chen a Marine?
    1 Apr 2014, 03:56 PM Reply Like
  • KIA Investment Research
    , contributor
    Comments (12949) | Send Message
     
    10553331,

     

    If ecosystems didn't exist, then a standalone smartphone (hardware + OS) would be judged on it's own merits and I'm sure phones like the Z30 would do just fine.

     

    The problem for BlackBerry is that ecosystems matter. They matter a lot.
    1 Apr 2014, 07:19 PM Reply Like
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