BlackBerry: Sales Appear To Remain Strong Despite Negative Reports

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Infinity Group
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Yesterday, Pacific Crest and Cleveland research reported that there may be production cuts at BlackBerry (BBRY). Pacific Crest has a reputation with disseminating negative reports on BlackBerry, and later being shown that these reports were inaccurate. Again, we believe this pattern has continued with the latest report. The share price was affected negatively with a 5% drop by market close yesterday. In pre-market trading, the share price was up 2% this morning.

Cleveland research reported that BB10 build targets could fall from 10M-12M to 6M-8M with sell-through likely half compared to launch time volumes. Concerning is our understanding of build targets was always 6M-8M for the quarter.

James Faucette, a Pacific Crest analyst, said in a research note "BlackBerry is still maintaining production levels of 1.5 million to 2 million devices a month." This statement appears to contradict the Cleveland research statement previously mentioned.

These negative articles have led Peter Misek from Jefferies to further investigate BlackBerry sales yesterday, and issue a statement late last night. Peter Misek could not find any evidence that the statements from Pacific Crest or Cleveland research were correct. The text from Peter Misek sent from his desk via email is as follows:

We conducted retail checks in the U.K. and Canada yet again, and the conclusion is clear, demand is very robust and Q10 demand is better than Z10 demand. According to our recent checks, build plans have not been cut. We are confident in our 2M+/month BB10 build plan estimate from our Asia trip a few weeks ago. We have heard of build plan cuts, but on the Blackberry 7 device side, which should help margins.

Another round of retail checks across the U.K. We spent yesterday afternoon contacting dozens of UK stores amongst the various Carphone Warehouse locations and carrier branded stores. Our analysis

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The Infinity Group specializes in researching medium to large cap companies within the tech industries. Utilizing our technical background with our financial industry knowledge, we provide an insightful look at investment opportunities.

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