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BlackBerry (BB) Reports Narrower-Than-Expected Loss in Q1

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  • BB
  • GDYN
  • DAVA
  • CDW

BlackBerry Limited BB reported better-than-expected first-quarter fiscal 2022 (ended May 31, 2021) results.

In the quarter, this Canada-based company aligned its software and services business around two key market opportunities — Cyber Security and IoT.

Net Loss

On a GAAP basis, quarterly net loss was $62 million or loss of 11 cents per share compared with a net loss of $636 million or loss of $1.14 per share in the prior-year quarter. The significant improvement primarily resulted from lower operating loss.

Non-GAAP net loss was $27 million or loss of 5 cents per share against net income of $7 million or 1 cent per share in the year-ago quarter. Adjusted loss per share was narrower than the Zacks Consensus Estimate of a loss of 6 cents.

BlackBerry Limited Price, Consensus and EPS Surprise

BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited Price, Consensus and EPS Surprise

BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote

Revenues

Quarterly total revenues were down 15.5% year over year to $174 million. While revenues from Cyber Security aggregated $107 million, the same from IoT totaled $43 million. Licensing and Other contributed $24 million.

In the IoT business unit, the company is witnessing significant progress of the auto business despite headwinds related to global chip shortage. Notably, the number of vehicles with QNX software embedded has increased to 195 million and royalty revenue backlog grew 9% year over year.

In Cyber Security, the company announced two new product launches as part of its Extended Detection and Response strategy — BlackBerry Gateway and Optics 3.0. It continues to witnesses strong pipeline growth for its unified endpoint security products.

Other Details

Gross profit declined to $114 million from $143 million in the year-ago quarter. Total operating expenses decreased to $172 million from $788 million. This was primarily due to zero goodwill impairment, which was $594 million in the prior-year quarter. Operating loss was $58 million compared with a loss of $645 million a year ago.

Cash Flow & Liquidity

During the first quarter of fiscal 2022, BlackBerry utilized $33 million of net cash in operating activities compared with a cash utilization of $31 million in the year-ago quarter.

As of May 31, 2021, the company had $339 million in cash and cash equivalents with $715 million of long-term debentures. This compares with the respective tallies of $214 million and $720 million at the end of the previous quarter.

Outlook

For fiscal 2022, BlackBerry expects revenues in the Cyber Security business to be at the lower end of the $495 million to $515 million range. IoT revenues are estimated between $180 million and $200 million. Licensing revenues are anticipated to be about $100 million.

Zacks Rank & Stocks to Consider

BlackBerry currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry are CDW Corporation CDW, Endava plc DAVA and Grid Dynamics Holdings, Inc. GDYN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CDW delivered a trailing four-quarter earnings surprise of 17.4%, on average.

Endava delivered a trailing four-quarter earnings surprise of 25%, on average.

Grid Dynamics delivered a trailing four-quarter earnings surprise of 133.3%, on average.

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