We’re expecting BlackBerry (BBRY) earnings on Friday before opening bell, and at least for now, investors appear to be optimistic. BlackBerry stock moved up by more than 3% today on the NASDAQ, reaching as high as $8.14 per share after solid gains on Tuesday as well.
What to expect in BlackBerry earnings
Raymond James analyst Steven Li, who has a Market Perform rating and $8 per share price target on BlackBerry, said in a report dated March 28 that he expects the Canadian company to report a “sequentially flattish quarter.” He’s looking for a 2% increase in revenue, which would bring it to $558 million, and losses of 21 cents per share. The consensus estimates for BlackBerry earnings are $560 million in sales and losses of 10 cents per share.
In the software segment, which BlackBerry is trying to increase its focus on, he expects revenue from Good Technology to offset the lack of patent licensing revenue. He expects a 24% sequential increase in hardware revenue with 800,000 units shipped. He notes that the company launched its Android-based Priv in Australia, South Africa, India and Nigeria, which should boost sales of the handset.
SAF revenues to keep declining
He expects BlackBerry earnings to show a continuing decline for SAF revenues, which he projects at $142 million, representing a $31 million or 18% sequential decline. He’s going to be keeping an eye on SAF’s impact on the company’s cash flow. Although BlackBerry has been cash flow positive for the last seven quarters, cash flow has been tumbling on the back of declining SAF revenues. He added that
BlackBerry must replace its SAF revenue stream with growth in software revenue and step the decline in hardware in order to stabilize its free cash flow.
More software growth needed
Li notes that the company has shown improvement in software sales but adds that more improvements are needed in this area.
