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Is BlackBerry Actually Going To Save $800 Million In Intellectual Property Costs?
- It appears BlackBerry will save approximately $800 million in intellectual property costs versus FY2014 levels, although the effect is approximately $300 million annualized when measured against Q2 FY2015 levels.
- BlackBerry hardware gross margins are estimated at between 14% to 19% for the first two quarters of FY2015, excluding inventory charges and the fixed intellectual property costs.
- This is consistent with the hardware gross margins of brands that are strong in the developing world. Passport and Classic sales will likely boost gross margins.
- Based on a more detailed look at hardware gross margins, it appears likely that BlackBerry can reach profitability at 13-14 million units, rather than the 17.5 million I mentioned before.
BlackBerry Needs To Sell 8MM - 9MM Smartphones To Meet FY16 Revenue Bogey
- Morgan Stanley downgraded BlackBerry to "Underweight" due to concerns over revenue projections.
- FY16P service and software revenue of $850MM and $500MM, respectively, implies the bogey for handsets/other revenue is $2.45B.
- At a price of $275 - $300 per unit, BlackBerry needs to sell 8MM - 9MM handsets in FY16.
- CEO John Chen previously estimated 10MM units sales were needed to break-even. I'm all in.
How Many BlackBerry BBM Downloads Are There On Android? BBM's Value Depends On Users
- User base size can help determine value of BBM. On Android, the download range provided by Google (50M to 100M) is too broad, and BlackBerry does not provide detailed data.
- Modeling with publicly available data leads to an estimate that BBM has between 90M and 97M downloads on the Android store on Nov 17, 2014.
- Model predicts that BBM will reach 100M on Google Play between Nov 23, 2014 and Jan 4, 2015.
BlackBerry: If Morgan Stanley Rates It 'Underweight', Is It Worth Considering?
- Morgan Stanley downgraded BlackBerry to 'Underweight' with a price target of $7.
- BlackBerry's shares are down sharply today.
- BlackBerry's cash and investment value stands at close to $6 per share, NOT accounting for any of its patents and businesses.
- Dip is a buying opportunity.
BlackBerry Down 5% On Morgan Stanley Downgrade - Gift Of A Dip?
- BlackBerry fell 5% in early morning trading on a downgrade by Morgan Stanley.
- Morgan Stanley is questioning BlackBerry's FY16P incremental revenue of $250MM and $100MM for software and messaging, respectively.
- FY16P revenue for software ($500MM) and service ($850MM) imply a $2.45B revenue bogey from handsets and "other".
- The downgrade implies BlackBerry won't reach the $2.45B bogey, but I think it can.
Why 15% Of BlackBerry Is Worth The Entire Market Capitalization
- BBRY investors have seemingly focused on services and phones while neglecting fast-growing segments.
- This fast-growing segment will drive the future of BBRY, leading to Project Ion and the company's place in IoT.
- BBRY might be the most undervalued company in technology.
BlackBerry Launches BES 12, Partners With Samsung To Ride The MDM Wave
- BlackBerry is banking on BES 12 to double its software revenues to $500 million by 2015.
- Although BlackBerry is the current leader in the MDM space, with about 14.4% market share according to IDC, it is losing share to rivals such as MobileIron.
- Trefis has a $9 price estimate for BlackBerry, which is about 20% below the current market price.
The $800M Secret The BlackBerry Shorts Don't Want You To Know About
- The BlackBerry "false narrative" is alive and well.
- Almost $1B in expense set to expire is being left out of the model.
- Retail shorts may have walked into a huge bear trap by falling prey to the mind tricks.
Update: BlackBerry's Dip Creates Buying Opportunity
- BlackBerry impressed on Thursday's investor day with news of partnerships with Salesforce and Samsung.
- BlackBerry stock was slightly hungover from the party on Friday & Monday, and pulled back.
- With renewed confidence in the PassPort and the Classic, we reiterate our $15 price target.
BlackBerry: Expected 50% Decline In FY16 Service Revenue Spooks Investors
- BlackBerry's CEO John Chen expects a 50% decline in FY16 service revenue, spooking investors.
- On Friday shares declined 7% as analysts voiced concern.
- Chen thinks BlackBerry can break even in FY16 despite service revenue declines.
- The market appears to be in a "show me" mode, but I'm all in.
- BlackBerry delivered a series of good news lately.
- BlackBerry's push to go cross-platform and its partnership with Samsung has been a major catalyst for the stock.
- However, data reveals that short interest has actually increased at the end of October.
- Will there be a short squeeze?
Why The Classic Was Released 10 Months After Its Announcement
- The Classic device will be launched on December 17, almost 10 months from when it was first announced.
- A careful balancing act has taken place to offset declining SAF revenue with growth in hardware and software.
- By replacing BB7 devices the Classic will accelerate SAF revenue loss but should provide good short-term gains in hardware while BES12 revenue grows.
- Revised software and service revenue expectations have put increased pressure on hardware sales to make up the gap.
- Operating expenses have decreased significantly, but BlackBerry may need to sell 17 million handsets to reach profitability in FY2016.
- With a more modest target of 13 million handsets, operating expenses would need to decrease by a further 13% for BlackBerry to reach profitability.
No China Deal And Samsung 'Partnership' Raises Questions For BlackBerry
- BlackBerry backs away from plans to enter China due to ‘political concerns’.
- Samsung strikes up a yet another “partnership” to support its KNOX security platform, this time with BlackBerry.
- How will Samsung and Blackberry monetize this partnership?
BlackBerry, Samsung And Salesforce.com: An Unlikely Alliance That Could Fuel BlackBerry's Turnaround
- BlackBerry and Samsung form partnership to put BlackBerry security into Samsung's Android ecosystem.
- BlackBerry and Salesforce.com form partnership to secure key customer relations communications on Salesforce.com platforms.
- The size and scale of these partnerships may reinvigorate BlackBerry as the go-to name in enterprise security.
- Longer term it can only be a big win for BlackBerry shareholders.
- Thursday's investors day and a Samsung partnership spurred BlackBerry to a 52-week high.
- With 102 million shares sold short and 10 days to cover, I expect more short covering.
- With BlackBerry's downside protected and positive catalysts in play, shorts are providing mullet money.
- The company is in a race against time to build up new revenue streams before the traditional services revenue from its older phones rolls off.
- BlackBerry’s stock on pace to beat the NASDAQ Composite Index this year for the first time since 2009.
- BlackBerry Passport is facing supply shortages due to excess demand which means that so far, the customers have accepted the new device.
- BES 12 - The big difference between it and its predecessors is the ability to support all BB OS devices as well as added support for Windows, iOS and Android.
BlackBerry: Master Chen Is Personally Lighting Up The Samsung Rocket
- BlackBerry announced a landmark strategic partnership with Samsung.
- Going cross-platform is a smart move and is very positively perceived by the market.
- BlackBerry's shares marked a new 52-week high yesterday at $12.54.
- Now is NOT the time to sell BlackBerry (or to go short).
Fri, Nov. 14, 9:40 AM
- During an investor day (transcript) held yesterday afternoon following its enterprise announcements, BlackBerry (BBRY -0.2%) guided for FY16 (ends Feb. '16) services revenue of $800M, down 50% from an expected FY15 level of $1.6B. The company's total FY16 revenue consensus is currently at $3.78B (nearly flat Y/Y),
- As it is, services revenue has been dropping due to consumer fee cuts, hardware installed based declines, and enterprise promotions. Services was 46% of August quarter revenue, down from 54% a year earlier; BlackBerry's total revenue fell 42% during this time.
- BlackBerry is counting on hardware stabilization and software growth to help offset the services decline; software revenue is expected to double in FY16 to $500M. Long-term, it hopes newer enterprise services (such as those announced yesterday) and Project Ion will boost services revenue.
- Raymond James' Steven Li (Market Perform) notes the FY16 services guidance was below the firm's estimate of $1.14B, and "reduces the margin for error on BBRY’s target of doubling software revenues next year to offset the [services] decline and maintain cash flow breakeven." He also thinks an FQ3 revenue consensus of $965M remains too high; RJ forecasts $899M.
- On the other hand, Li declares the Samsung deal bolsters BES12's credibility as a cross-platform enterprise mobility management (EMM) solution. He's also pleased with John Chen's disclosure than a Fortune 10 client plans to use BES12 to manage non-BlackBerry devices; "almost all" of BlackBerry's initial 100+ BES12 deployments are believed to be for managing BlackBerrys.
- Shares are near breakeven in early trading. They rose 7% yesterday.
- Update (2:35PM ET): Shares are now down 6.4%.
Fri, Sep. 26, 10:18 AM
- Down initially following its mixed FQ2 results, BlackBerry (NASDAQ:BBRY) has quickly reversed course.
- Possibly helping: John Chen has forecast BlackBerry's software revenue (aided by the upcoming BES 12 launch, and perhaps also QNX and Secusmart), will double in FY16 from an expected FY15 level of $250M. Software/other sales were 8% of revenue in FQ2.
- Chen also states BlackBerry has sold 200K Passport phones since the device's Wednesday launch. End-user phone sales were an estimated 2.4M during FQ2.
- RBC's Mark Sue (Market Perform) notes services revenue (-19% Q/Q to $421M) was below his $453M estimate, and thinks the number is "likely to sustain concerns about BlackBerry’s declining subscriber base." However, phone shipments of 2.1M were above RBC's 1.65M forecast.
- Cowen's Tim Arcuri (Market Perform) calls BlackBerry's 47.5% gross margin "solid," At the same time, he argues "investor concerns are increasingly likely to key on how/when new technology and growth initiatives can/will arrest the Service decline and deliver a revenue inflection beyond Hardware."
- FQ2 results, details.
Fri, Sep. 26, 9:30 AM
- BlackBerry's (NASDAQ:BBRY) R&D spend fell 22% Q/Q and 48% Y/Y to $186M in FQ2, and its sales, marketing, and admin spend fell 51% Q/Q and 63% Y/Y to $195M. That helped EPS beat estimates in spite of a revenue miss.
- Also helping: Though BlackBerry's revenue fell by $50M Q/Q and its mix shifted towards hardware (lower-margin) relative to services, adjusted gross margin only fell by 50 bps to 47.5%. Hardware GM was positive.
- Hardware was 46% of revenue, services 46%, and software/other 8%. That compares with a 39%/54%/7% split in FQ1.
- Revenue was recognized on 2.1M phone shipments (up from FQ1's 1.6M), and an estimated 2.4M phones were sold to end-users (down from FQ1's 2.6M). Shipments were at 3.7M a year ago, and end-user sales 5.9M.
- North American revenue -28% Y/Y to $297M; EMEA -44% to $368M; Latin America -43% to $111M; Asia-Pac -49% to $140M.
- BBM users rose by 6M Q/Q to 91M. They were at ~60M before Android/iOS apps arrived last year.
- BlackBerry still expects to achieve breakeven cash flow by the end of FY15 (ends Feb. '15).
- FQ2 results, PR
Fri, Sep. 26, 7:01 AM
Thu, Sep. 25, 5:30 PM
Thu, Jun. 19, 2:15 PM
- "The short trade is over in this name for now - for now," says BGC's Colin Gillis after taking stock of BlackBerry's (BBRY +11.2%) FQ1 numbers. "They've got enough liquidity, (and) they've given us clear profitability targets."
- Cowen's Timothy Arcuri likes the bottom-line improvement, as well as BlackBerry's gross margin expansion and better-than-expected services numbers. "We still see BES 12 transition as the key to sustained LT growth, but current momentum will certainly resonate with investors."
- Services revenue, affected by BB10-related consumer price cuts, fell to 54% of revenue in FQ1 from 56% in FQ4. Hardware rose to 39% from 37%, and software/other was steady at 7%.
- On the CC, John Chen mentioned early sales of BlackBerry's $200 Z3 phone (5", touch-only, launched in Indonesia) have been strong, and that inventory has run low at times. FQ1 end-user phone purchases of 2.6M were down from FQ4's 3.4M and FQ3's 4.3M.
- Job cuts at work: SG&A spend fell 41% Y/Y to $400M, and R&D spend 34% to $237M. 19% of the float was shorted as of May 30.
- Earlier: FQ1 results, details
Thu, Jun. 19, 7:30 AM
- 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.
Thu, Jun. 19, 7:02 AM
Wed, Jun. 18, 5:30 PM
Fri, Mar. 28, 2:05 PM
- Initially up sharply following after posting a big FQ4 EPS beat to go with an (also large) revenue miss, BlackBerry (BBRY -2.2%) has reversed course.
- Analysts are worried the cost cuts that drove the EPS beat - R&D/SG&A spend fell 34% Y/Y to $601M - will only do so much. "John Chen did what John Chen is known for. He came in and he's cut the cost base," says BGC's Colin Gillis.
- On the CC, Chen said BlackBerry plans to re-launch BB7-based Bold phones that have seen strong demand. He also stated three new high-end QWERTY BlackBerrys would likely arrive in the next 18 months. "I hope nobody thinks we don’t take seriously the handset business."
- Sales of the high-end/QWERTY Q10 fell flat last year, as the iPhone and Samsung's Galaxy line continued dominating the high-end. BlackBerry recently unveiled the Q20, a new QWERTY flagship.
- Chen also reiterated BlackBerry aims to be profitable in FY16 (ends Feb. '16), and said the company will "take a very serious look" at bringing BBM to PCs. BBM's active user base has surged past 85M since Android/iOS apps launched last fall.
- 3.4M BlackBerrys were sold to end-users in FQ4, down from 4.3M in FQ3 and 5.9M in FQ2. Due to inventory-clearing, BlackBerry only recognized revenue on 1.3M shipments.
- Previous: BlackBerry's results, details
Fri, Mar. 28, 7:35 AM
Fri, Mar. 28, 7:02 AM
Fri, Mar. 28, 12:05 AM
Thu, Mar. 27, 5:30 PM
Dec. 20, 2013, 2:03 PM
- With a lot of bad news priced in, BlackBerry (BBRY +13.6%) has shot higher following its FQ3 report, as investors applaud a Foxconn deal that (for now) will limit BlackBerry's in-house phone design work to a limited number of high-end enterprise devices. Talking to CNBC (video), John Chen asserts the deal will help BlackBerry become profitable by FY16 (ends Feb. '16).
- Chen: "The number one thing I noticed (as CEO) was that our handset volume was dropping and with that, our [fixed] cost was too high ... [Foxconn] has the ability to bring the cost down ... The focus of the overall company is shifting toward enterprise, government customers and software services."
- With BlackBerry expected to lose $1.37/share in FY14 and $1.10/share in FY15, a return to profitability in FY16 would represent a major turnaround.
- Also: On the CC (transcript), Chen stated BlackBerry is aiming to become "cash flow neutral from operations" in FY15, and expects "reasonably good revenue" from BBM around the FY16 timeframe.
- Short-covering is likely contributing to today's gains: 33% of the float was shorted as of Nov. 29.
- More on BlackBerry
Dec. 20, 2013, 10:05 AM
- With hardware sales continuing to fall, BlackBerry's (BBRY +2.2%) FQ3 hardware/services/software revenue mix was 40%/53%/7%. That compares with 49%/46%/5% in FQ2, and 61%/36%/3% in FQ1.
- Estimated phone sell-through of 4.3M units was below estimated FQ2 sell-through of 5.9M, and reported FQ1 sell-in of 6.8M.
- EMEA now makes up 46% of revenue; sales to the region fell 47% Y/Y. North American sales (28.5% of total) also -47%, Latin America (11.3% of total) -75%, Asia-Pac (14.2% of total) -56%.
- With BlackBerry's massive job cuts in full swing, R&D spend fell 18% Y/Y to $322M. However, SG&A spend rose 11% to $543M; declines are likely in future quarters.
- More on BlackBerry
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