On Apr 25, 2014, we issued an updated research report on BlackBerry Limited (BBRY).
BlackBerry has delivered positive earnings surprises in two of the last four quarters last year, with an average miss of 94.74%. The company reported mixed financial results for the fourth quarter of fiscal 2014 with the bottom line beating the Zacks Consensus Estimate but the top line missing the same.
By offering a convenient, reliable and secure way of accessing email in real time, BlackBerry has been able to successfully differentiate its products from the other offerings in the communications market. BlackBerry commands a strong brand value in the wireless PDA market, leveraging the popularity of its push email system.
The company holds 2,033 patents ranging from mobile security to push e-mail in high-end smartphones. Its strong patent portfolio is also expected to help in further innovation.
A major growth product for BlackBerry is its BlackBerry Enterprise Service 10 (BES10) solution. This is a cross-platform product interoperable with Apple’s (AAPL) iOS and Google Inc.’s (GOOG) Android. BES10 provides flexibility, scalability, high security and cost-effectiveness to its customers. Recently, the company also launched the BES12 platform. BlackBerry remains highly optimistic about the product and expects it to generate solid service revenues in 2015.
On the flip side, BlackBerry is facing headwinds like an ever-increasing competitive landscape, a stagnant product portfolio and an unfavorable product mix. The launch of Apple’s iPhone came as a big blow. The situation deteriorated after Google launched its Android software and several handset manufacturers adopted the operating system.
To worsen matters, BlackBerry’s much-awaited BB10-based smartphones failed to generate significant demand. In the fourth quarter of 2014, the company sold just around 1.1 million BB10-based smartphones out of its total handset sales of 3.4 million mobile devices.
BlackBerry currently has a Zacks Rank #2 (Buy).
Stocks That Warrant a Look
Other well-performing companies worth considering in this sector include Nokia Corp. (NOK) and ShoreTel, Inc. (SHOR). Both Nokia and ShoreTel are Zacks Rank #1 (Strong Buy) stocks.
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