What's in the Cards for BlackBerry (BBRY) in Q3 Earnings?
BlackBerry Limited BBRY is scheduled to report third-quarter fiscal 2017 operating results on Dec 20, 2016 before market opens.
Last quarter, the company’s loss was narrower than the Zacks Consensus Estimate. As a result, the company delivered a positive earnings surprise of 70.00%. BlackBerry reported positive surprises in each of the last four quarters with an average beat of 61.25%. It remains to be seen how the company performs this quarter, especially with the complete shift to software and services.
Factors Likely to Influence this Quarter
BlackBerry announced its decision to discontinue the production of BlackBerry phones and outsource the same. This decision was welcomed by investors as the company’s software and services arm has been growing steadily and generating the bulk of revenues.
The company has outsourced the production of its handsets to Chinese handset manufacturer, TLC Communication Technology Holdings Ltd. (“TCL”). In fact, the company recently launched its latest phone, DTEK60, which was manufactured by TCL. The phone runs on Alphabet Inc.’s GOOGL Android operating system. We are also positive on the company’s partnerships with leading names in the industry such as Ford Motor Company F. We expect the company’s rapid innovation and collaborations to drive future growth. The company’s stock has outperformed the broader Telecommunications Services industry over the past three months. The stock has gained 3.13%, while the industry declined 2%.
However, the company continues to face challenges like increasing competition as it moves completely into the software and licensing space,, macroeconomic risks and adaptation to a changing business model. Cost management is another concern for the company.
Earnings Whispers
Our proven model does not conclusively show that BlackBerry is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: BlackBerry has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 4 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: BlackBerry carries a Zacks Rank #3 which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
Note that stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
BLACKBERRY LTD Price and EPS Surprise
BLACKBERRY LTD Price and EPS Surprise | BLACKBERRY LTD Quote
A Stock to Consider
Below is a stock which investors could consider as our model shows it has the right combination of elements to post an earnings beat this quarter:
LivePerson Inc. LPSN is expected to report fourth quarter earnings on Feb 8, 2017. The company has an Earnings ESP of +50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
LIVEPERSON INC (LPSN): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
ALPHABET INC-A (GOOGL): Free Stock Analysis Report
BLACKBERRY LTD (BBRY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
