US Equity Market Update, September 25: BlackBerry and Its Peers
BlackBerry’s price movement
BlackBerry (BBRY) has a market cap of $3.40 billion. BlackBerry’s YTD (year-to-date) price movement is going down day by day. After announcing its 2Q16 earnings on September 25, 2015, BlackBerry stock fell 7.68% to close at $6.49 per share. BlackBerry’s price movements on a weekly, monthly, and YTD basis are -13.47%, -4.42%, and -40.89%, respectively. It’s trading at -12.53% on a trailing five-day basis.
Technically, BlackBerry has broken all the major supports of 20-day, 50-day, and 200-day moving averages. Currently, it’s trading at -12.04%, -13.24%, and -29.77% below the 20-day, 50-day, and 200-day moving averages, respectively.
The First Trust NASDAQ CEA Smartphone Fund (FONE) invests 2.82% of its holdings in BlackBerry. FONE tracks a tiered equal-weighted index of companies classified as smartphone companies by the Consumer Electronics Association. FONE’s YTD price movement is -10.36%. The PowerShares FTSE RAFI Developed Markets ex-US ETF (PXF) invests 0.13% of its holdings in BlackBerry.
Below are BlackBerry’s (BBRY) competitors and their market caps.
- Nokia (NOK) – $24.54 billion
- SAP SE (SAP) – $79.07 billion
- International Business Machines (IBM) – $142.44 billion
- MobileIron (MOBL) – $251.31 million
BlackBerry’s 2Q16 performance
BlackBerry reported net revenue of $490 million in 2Q16, a drop of 25.5% when compared to net revenue of $658 million in 1Q16. Revenue from hardware has fallen 23.5%.
Based on region, revenues for North America, Europe and Africa, Latin America, and Asia Pacific have fallen 38.2%, 17.5%, 21.4%, and 8.13%, respectively, in 2Q16 on a quarterly basis. The cost of sales as a percentage of sales increased to 61.4% in 2Q16, an increase of 22% compared to the cost of sales as a percentage of sales of 50% in 1Q16. The company reported net income of $51 million.
Cash and cash equivalents and inventories increased 24.2% and 6.7%, respectively. Short-term investments fell 12.56%. The debt-to-equity ratio increased to 0.64 in 2Q16, an increase of 45% compared to the debt-to-equity ratio of 0.44 in 1Q16.
On June 10, 2015, BlackBerry announced the availability of BlackBerry Leap in Italy, South Africa, and Nigeria. On July 22, BlackBerry entered into a definitive agreement to acquire AtHoc to enable secure mass communication and collaboration. This acquisition was completed on September 23. On August 11, the company announced the BlackBerry Passport Silver Edition in Vietnam.
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