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BlackBerry’s Big Challenges

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There's no denying that BlackBerry faces stiff competition from Google’s Android and Apple’s iOS operating systems in the smart phone market, but that’s not stopping BlackBerry from churning out new products. The company has run full-steam ahead with the BlackBerry 10 operating system phones, which might give it a short-term lift, according to Michael Genovese, managing director at MKM Partners.

“Investors widely expect that they’re going to beat the quarter on headline numbers,” he said. “Revenues, units, gross margins, EPS should all be pretty strongly above where the sell-side consensus is right now, but that’s expected and that’s priced in already.”

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While Genovese said BlackBerry 10 might help results this quarter, he doesn’t expect the good times to last. Genovese is calling for a downside to second quarter and beyond.

An important number to watch according to Genovese is the number of global subscribers. He said BlackBerry subscribers dropped to 76 million in the fiscal fourth quarter, down from 79 million in the prior quarter. The Street expects the company to announce another two to three million subscriber losses this time around.

Blackberry will release earnings on Friday before the market opens.

Genovese has a “Sell” rating on BlackBerry.

Disclosure: Genovese does not own shares of BlackBerry.

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