BlackBerry: Positive Developments

Jun. 28, 2017 11:06 AM ETBlackBerry Limited (BB), BB:CA134 Comments
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Searching For Value


  • BlackBerry's revenue miss caused its stock to decline.
  • I do not share the pessimism as BlackBerry is making progress in multiple areas.
  • Recent developments have caused more breathing room for the company as it focuses on future growth.

BlackBerry (BBRY) released its earnings report on the 23rd of June. It is safe to say that investors were far from pleased by the report as the stock declined fast. My view is that BlackBerry’s quarter was far from bad. There were plenty of positive developments in the quarter that will help the company become successful again in the future. We must not forget that this company is currently still in the transitioning stage to becoming a successful software and services company as I mentioned in an earlier article. From what I see, BlackBerry is well underway in its efforts to achieve just this and we can already see the positive impact this has.

Quarterly results

During the first quarter, BlackBerry actually did better than expected in terms of EPS as the expectations were -$0.02, but the company managed to generate an EPS of $0.02. Although this sounds great, we must keep in mind that BlackBerry often reports an earnings beat, which does not make this event very special. The most important thing to look for when analyzing BlackBerry’s financial results is revenue.

The reason for this is that BlackBerry has been working on turning its business around for quite some time now. A major indication of this turning into a success are the developments surrounding its revenue. This is why investors were so disappointed when BlackBerry reported revenue of $244 mln, which was $20 mln below the consensus estimate.

While I get that investors want to see results as soon as possible, I do not believe that investors should see the revenue miss as a sign that the turnaround is failing. There are plenty of reasons to be excited about the developments that were seen during the quarter.

Improving margins

I also have to add that while people are

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I am an investor with professional experience analyzing stocks. My portfolio often consists of a handful small, micro and nano caps. I will discuss most of the stocks that I hold in my portfolio on Seeking Alpha, while also writing about larger stocks that interest me.

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