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Why Is BlackBerry (BB) Up 30.1% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for BlackBerry (BB). Shares have added about 30.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is BlackBerry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

BlackBerry Q4 Earnings Beat Estimates, Revenues Rise Y/Y

BlackBerry reported healthy fourth-quarter fiscal 2020 (ended Feb 29, 2020) results, with adjusted earnings surpassing the Zacks Consensus Estimate.

In fiscal 2020, the cybersecurity software and services company released more than 30 new products and made strong progress on developing BlackBerry’s zero-trust architecture as part of the Spark platform.

Bottom Line

On a GAAP basis, net loss in the quarter was $41 million or a loss of 7 cents per share against a net income of $51 million or 8 cents per share in the year-ago quarter. The year-over-year decline was primarily caused by an operating loss and lower recovery of income tax. In fiscal 2020, net loss was $152 million against a net income of $93 million in fiscal 2019.

However, non-GAAP net income in fiscal fourth-quarter came in at $51 million or 9 cents per share compared with $60 million or 11 cents in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 5 cents.


Quarterly total GAAP revenues increased 10.6% year over year to $282 million. By product and service type, revenues from IoT fell 11.8% year over year to $127 million, primarily due to BlackBerry Technology Solutions (BTS). BTS has been unexpectedly impacted by the slowdown in the auto industry supply chain due to the pandemic.

BlackBerry Cylance revenues came in at $43 million, benefiting from the acquisition of Cylance. This boosted the company’s software and services business as it has provided additional cybersecurity capabilities with AI and ML technology. Revenues from Licensing were $108 million, up 9.1% year over year. The upside reflects on better-than-expected performance attributable to some business that came in early. Other revenues declined to $4 million from $9 million. For fiscal 2020, revenues increased 15% year over year to $1,040 million.

Non-GAAP revenues in fiscal fourth-quarter increased 13.2% to $291 million, reflecting record Software and Services revenues (up 16% year over year to $287 million).

Other Quarterly Details

Gross profit increased to $212 million from $206 million in the year-ago quarter, led by top-line growth. Total operating expenses increased to $253 million from $178 million. Operating loss was $41 million against an operating income of $28 million in the prior-year quarter.

Cash Flow & Liquidity

In fiscal 2020, BlackBerry generated $26 million of net cash in operations compared with $100 million in fiscal 2019. As of Feb 29, BlackBerry had $377 million in cash and equivalents with $120 million of lease liabilities.


Currently, there is a lot of uncertainty across the global economy due to the coronavirus pandemic. So BlackBerry did not provide any specific financial outlook for fiscal 2021, as things are changing daily. The company anticipates a tough first quarter due to the impact of the COVID-19 on its business. This may persist into the second quarter as well. That said, the company doesn’t expect a stronger second half of fiscal 2021 compared with the first half.

BlackBerry continues to invest in product development and go-to-market strategy to drive long-term sustainable growth. Its revenues will likely be impacted by continued headwinds to global auto production and sales. However, the company’s Cylance products, including CylanceGUARD, are helping customers combat cybersecurity and privacy risks as the number of BYOD endpoints increases in a remote working environment.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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