Blackberry Q1 results to be signs of health
Whether BlackBerry Ltd.’ s turnaround efforts are working and how sales of its new line of BlackBerry smartphones are doing will finally become a little clearer for investors on Friday when the company formerly known as Research In Motion Ltd. reports first-quarter earnings.
For the first time, analysts will be able to see how BlackBerry’s touchscreen Z10 has performed for a full quarter in the coveted United States market, while at the same time, seeing early sales figures for the BlackBerry Q10 — which features the Waterloo, Ont.,
the company needs more downsizing
company’s iconic physical keyboard — following its launch in Canada and the United Kingdom.
Following more than a year of declining profit and falling sales, BlackBerry is pulling out all the stops to reassert itself in the global smartphone industry as it looks to challenge the dominance of Apple Inc.’s iPhone and devices running on Google Inc.’s Android software.
Last quarter, BlackBerry returned to profitability, generating a new profit of US$98million, or US19¢ per diluted share, topping Wall Street expectations. Still, revenue was down and fell 36% from the previous year to US$2.7billion.
BGC Partners analyst Colin Gillis is expecting BlackBerry to report revenue of US$3.44billion with earnings of US7¢ per share for the three months ended June 1, above Wall Street consensus estimates of about US$3.4-billion and earnings of US4¢ per share.
“While we remain generally positive on the changes that the new management has affected, we mention that just as BlackBerry has a product to compete in the high-end market, that market is showing signs of slowing down and the competition is rotating to mid and low-price smartphones,” Mr. Gillis said in a note to clients this week.
“In particular, we look at Nokia’s 521 smartphone that has an unsubsidized price point of US$150 as an example of how the competition is positioning for share and growth in emerging markets.”
Last month, BlackBerry unveiled a new lower-cost BlackBerry 10 device, known as the Q5, which is designed to help the company maintain and expand its user based in developing and growing smartphone markets in Africa, the Middle East and Asia.
While much of the focus will be on BlackBerry’s new BB10 devices, many analysts want to know how the company’s legacy BlackBerry 7 devices are selling around the world.
National Bank Financial analyst Kris Thompson said he expects BlackBerry to strike a bullish tone on Friday’s conference call with the Q10 set to hit the U.S. market next quarter, but he says headwinds remain.
“Given our thesis of a fastdeclining paying BB7 base and an unprofitable stand-alone hardware business, we would still avoid this stock,” he said in a note to clients this week.
“Our view remains [that] the company needs more downsizing and focus on its niche enterprise and QWERTy constituents.”
Shares of BlackBerry are up roughly 8% this week, and have risen about 13% since Jan. 31, the day after the company unveiled the BlackBerry 10 operating system at a media event in New york City.