Seeking Alpha

BlackBerry soars after FQ1 results; expects break-even cash flow this year

  • FQ1 revenue of $966M slipped 1% from the previous quarter. Breakdown: 39% hardware, 54% services, 7% software and other. Hardware revenue recognized on about 1.6M smartphones, up from 1.3M the previous quarter.
  • About 2.6M phones sold to end customers during Q.
  • Adjusted gross margin of 48% gains 500 basis points from FQ4.
  • Cash on hand rises to $3.1B from $2.7B, boosted by a tax refund and sale of real estate. Excluding those, company burned through $255M in FQ1, down from $784M previously. Management expects break-even cash flow by the end of fiscal 2015.
  • Previously: BlackBerry beats by $0.15, beats on revenue
  • BBRY +9.8% premarket
  • CC begins at 8 ET.

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Comments (30)
  • John Kastanes
    , contributor
    Comments (949) | Send Message
     
    Chen is a man of integrity, he delivered. Integrity is not within Wall Street's lexicon!
    19 Jun 2014, 07:34 AM Reply Like
  • Quoth the Raven
    , contributor
    Comments (2121) | Send Message
     
    $15 by the end of the year, no questions asked.
    19 Jun 2014, 07:38 AM Reply Like
  • wizjinx
    , contributor
    Comments (424) | Send Message
     
    I bought in yesterday solely on your advice - I didn't really have the time to do any serious dd. You da man QTR!
    19 Jun 2014, 08:35 AM Reply Like
  • ufaquarian
    , contributor
    Comments (68) | Send Message
     
    same here QTR , I follow you on BBRY . I have been buying and selling BBRY for past 2 months but this time around and I am keeping them. By when do you expect it to touch $15 ?
    19 Jun 2014, 08:41 AM Reply Like
  • ELLAS
    , contributor
    Comments (2460) | Send Message
     
    John Chen has shown the turn around effect. He's stopping the bleeding and is turning this company around. Can't wait for the bell, looking forward to the share price increase.
    19 Jun 2014, 07:42 AM Reply Like
  • LYogi
    , contributor
    Comments (2408) | Send Message
     
    it's a beautiful day in the neighbourhood
    19 Jun 2014, 07:42 AM Reply Like
  • BBwetrust
    , contributor
    Comments (1968) | Send Message
     
    And the sun is shining too.
    19 Jun 2014, 10:22 AM Reply Like
  • ELLAS
    , contributor
    Comments (2460) | Send Message
     
    Did Andreas cover his short position? Lol
    19 Jun 2014, 07:45 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (1986) | Send Message
     
    @Ellas,

     

    "Did Andreas cover his short position? Lol"

     

    I'm positive he did. I saw where someone covered two shares this morning...:).

     

    Just picking on you AH. No harm...
    19 Jun 2014, 09:29 AM Reply Like
  • mag1205
    , contributor
    Comments (1797) | Send Message
     
    Thanks Ellas for reminding Andreas. I guess we won't see him here anymore. Enough of his negativity.
    19 Jun 2014, 10:50 AM Reply Like
  • Egon Zee Research
    , contributor
    Comments (363) | Send Message
     
    now time to wait for the short squeeze!
    19 Jun 2014, 07:50 AM Reply Like
  • BBwetrust
    , contributor
    Comments (1968) | Send Message
     
    It is about time to give the long suffering longs relief.
    19 Jun 2014, 07:55 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2011) | Send Message
     
    Blackberry's security software expertise is worth more than the market cap of the company. That is the one reason I would hold the stock. I would put Blackberry's security features at more than 15 billion in value - easily.

     

    Think about this: Governments in the middle east and Asia were trying to block Blackberry services in their countries unless Blackberry agreed to let them have access to their data - that's how good the security is.

     

    And remember, the U.S. is behind all this pressure to gain access to Blackberry's networks. It's just that the Americans are using proxies to make themselves seem 'clean.' So, if a government that spends billions in black budget dollars still can't access the data without forcing blackberry's hand in public (again, by way of various proxy governments), you know Blackberry's tech security is much better than the rest.

     

    I like their decrease in cash burn and I like the forcast to be cash flow positive within the next 12 months. But again, it is the security expertise that this company has that makes them worth 3 times what their current market cap is.

     

    Governments all around the world, but moreso the American government, want to watch, listen, intercept, control and manipulate information. How much do you think Blackberry's tech is worth to the U.S. government and its influencers?

     

    How much do you think Blackberry's tech is worth to a government that wants its hands on more than 50 trillion worldwide and 16 trillion domestically each year?

     

    Heck, tech companies like Blackberry have a value north of 100 Billion when you consider what governments like Obama's administration could extract by incorporating such tech into their survellance data systems.

     

    I just hope Blackberry doesn't get leveraged the way Dan Snyder and his football team is currently.

     

    Yeah, you can mock my beliefs all you want (I know it is coming), but ask yourself this question:

     

    Who has benefited the most from the attacks on 9-11? The 'terrorists' or the U.S. government? Remember, it takes motive and opportunity to make something happen. The U.S. government had both relating to 9-11.
    19 Jun 2014, 07:56 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11520) | Send Message
     
    It's not that Blackberry's tech is so good as much as the fact it is not playing ball with bureaucrats that want to step on people's rights to free speech. That alone should give Blackberry a edge. It is shameful that the US bureaucrats are on the forefront of infringing on privacy and free speech rights in the mobile area.

     

    The hope is Blackberry will continue to advance their phones to keep up with the majors. With Apple playing copy the very companies they claim copy their design, that shouldn't be hard to do. Apple did it in a year.
    19 Jun 2014, 10:22 AM Reply Like
  • ELLAS
    , contributor
    Comments (2460) | Send Message
     
    BlackBerry made more than $20M in profit this Q. Great News. Let the Short Squeeze come.
    19 Jun 2014, 08:21 AM Reply Like
  • Chris Lau
    , contributor
    Comments (2321) | Send Message
     
    Long and strong. (BBRY) is shaping up as a pure play for MDM. (MOBL) and others will not survive in a year or two, further boosting the value of (BBRY).

     

    Similar to being bullish on (ALU) and (NOK), (BBRY) is the next three-bagger over the next couple of years.
    19 Jun 2014, 08:22 AM Reply Like
  • alext1379
    , contributor
    Comments (709) | Send Message
     
    As a Canadian, I cheer Blackberry and the BB10 OS.

     

    As an investor, I jeer them for the following reasons.
    Still burning cash if you factor our real estate and tax refunds.
    2.6m phones is low considering they now have 4 or 5 models out including cheaper new ones.
    What concerns me most is whether they are acquiring any new corporate customers. They claim to be targeting businesses but I have not heard yet of any new contracts (even renewals).

     

    I am skeptical about the AMZN store news. It may keep people from leaving BB but I can't see it making anyone adopt BB.

     

    I'm sitting out this one for the summer, may even buy PUTs depending on how high this jumps today.
    19 Jun 2014, 08:51 AM Reply Like
  • User 509088
    , contributor
    Comments (1206) | Send Message
     
    sure hope it works out for you all and all my friends in k-w.

     

    it's played out so much like the history of nortel, though. they're going to have to rely on the handsets of others, they're going to have to hope that those other makers don't monetise the niche bb hopes to occupy.

     

    then they have to hope that things stop evolving so their pioneering work retains value.

     

    that's tough. look how quickly they got left behind in their main business. and they're not alone- nokia and motorola did the same faceplants.

     

    but i hope it works out for you all.
    19 Jun 2014, 08:52 AM Reply Like
  • Corey Sommers
    , contributor
    Comments (957) | Send Message
     
    This is one of those rare situations where you have to sit back with your popcorn and watch, and wonder how the notable SA shorts will try to spin this, or perhaps just go away quietly. Should be some good entertainment.
    19 Jun 2014, 08:57 AM Reply Like
  • Cha-Charlie
    , contributor
    Comments (68) | Send Message
     
    J.C is a man. Even I lost a fortune on BBRY stock before, now it seems it ignite my hope. He knows what should be done and how get it done, better than Thorsten/Mike/Jim. focus on BBRY strengh, stretch out our strengh, explode it then BBRY not only survives but also flourish.
    19 Jun 2014, 09:01 AM Reply Like
  • Cubanezul
    , contributor
    Comments (23) | Send Message
     
    Thank your Mr.Chen. Congrats to all the shareholders.
    19 Jun 2014, 09:24 AM Reply Like
  • Bradrhp
    , contributor
    Comment (1) | Send Message
     
    Is it pointless to get in on the action now? Does anyone see the stock moving more today?
    19 Jun 2014, 09:35 AM Reply Like
  • Corey Sommers
    , contributor
    Comments (957) | Send Message
     
    With all the analyst upgrades sure to follow, and other bullish news no doubt around the corner, how can anyone see this under $10 for too much longer? People will remember the day they could buy this for under $10. Just my two cents, do your own due diligence.
    19 Jun 2014, 09:45 AM Reply Like
  • Egon Zee Research
    , contributor
    Comments (363) | Send Message
     
    Anytime the stock is less than $10 is still a great time to get in
    19 Jun 2014, 09:45 AM Reply Like
  • Overanalytical
    , contributor
    Comments (842) | Send Message
     
    That is one massive hyperlink
    19 Jun 2014, 09:43 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5760) | Send Message
     
    Impressive. (BBRY) does seem on a turnaround, but is anybody concerned about the falling revenue?
    19 Jun 2014, 10:18 AM Reply Like
  • Cliff Hilton
    , contributor
    Comments (1986) | Send Message
     
    @ Michael Bryant,

     

    "...but is anybody concerned about the falling revenue?"

     

    I am! It appears profit is just around the corner. We see the product pipeline and it's not all hardware. Good news is flowing.
    19 Jun 2014, 10:23 AM Reply Like
  • marktuthdr2
    , contributor
    Comments (104) | Send Message
     
    Finally made back some of the crushing losses on this baby from last fall. I've been watching this like a hawk for 2 yrs, and have learned not to discount the shorts though. I bought my first BBRY phone last night, the Q10, and am excited for its arrival tomorrow. I sold some on limit at 9.3 today, and have another limit at 10. Then I'll buy more on the next pullback. JC is the man. Shorts, run for cover. Yes, some of the extra cash horde is from sale of real estate and another one-timer, yet he has a knack for doing whatever it takes to get it done, so you shorts and naysayers say what you like...BBRY is on the way back, and is building positive momentum. This may be a 2 or 3 bagger, or more, with JC at the helm. I didn't want to buy a BBRY phone until I had more evidence they would be around a while, and their are many thousands (or more?) people out there that have been holding off for the same reason...many of us know their phones are top-shelf, and the extra security we're willing to pay a little bit extra for. And the style is sweet. I just bought one of the better looking mobiles out there.
    19 Jun 2014, 10:55 AM Reply Like
  • Tobias Schmitz
    , contributor
    Comments (488) | Send Message
     
    What I really like is the number of sold phones going up and thus revenue decline is almost stopped, this is good news. I hope this is the start of an continuous upward movement!
    19 Jun 2014, 11:26 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2011) | Send Message
     
    http://onforb.es/1pR9D2E

     

    Forbes article on Blackberry's main strength:

     

    'Sure, you can buy one of their devices. Early reports about their new Q20 smartphone are favorable, particularly if you’re a fan of the physical keyboard, old-school trackpad and menus. But I love my Samsung S4 and can’t wait to get my hands on the S5. My marketing person loves her Motorola. And you’d have more luck taking away my project manager’s youngest son than prying his iPhone out of his hands. People want their devices, their apps, their personalized toys. And that’s OK with BlackBerry too.

     

    So instead of pushing their devices on the business community the company is instead emphasizing its main strength: security. And this is something that few, even Apple and Google lovers can argue: BlackBerry’s security services are among the best of breed. It’s based around COPE, or company-owned-personal... devices which one report explains as a “a hybrid that sits between free-for-all BYOD and traditional company-owned computers that forbade personal use and held zero expectations of privacy for employees.” The COPE vs. BYOD debate is described well in this 2013 blog by Robert Sheldon. The decision as to which security model is better is yours. BlackBerry has already made theirs: it’s COPE.

     

    BlackBerry is effectively telling us this: “Go ahead, use any device you want. We’ll secure it for you.” They’ve got plenty of competition – big companies like AT&T, Citrix, VMWare and Symantec as well as excellent niche players like Nitrodesk, MobileIron, Mocana and many others who offer great alternatives. But BlackBerry has the name recognition, the media attention and a list of big international clients like Daimler AG, Airbus and Tokheim, not to mention most of the U.S. Government as its references. Even the President has a BlackBerry. He’d love to use an iPhone. But he’s not allowed to. Enough said?'

     

    When more Target-like Data breaches surface in the coming years, how much do you think a company like Blackberry can charge clients to go in and secure their improperly protected data systems? My guess is 100s of millions of dollars per client. Multiply that times many clients and you have a revenue stream and a market cap that is worth 10s of Billions and 100s of Billions, respectively.
    20 Jun 2014, 04:02 PM Reply Like
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