By By Adriano Marchese
Earnings per Share (EPS): In the period ended Nov. 30, analysts polled on FactSet expect a narrowing of loss per share to 4 U.S. cents from a loss of 5 U.S. cents a year earlier.
Revenue: Analyst consensus estimates predict virtually flat revenue at US$169.1 million in the third quarter, compared to revenue of US$169 million reported last year.
Adjusted EPS: Excluding one-off and exceptional items, analysts are expecting an adjusted loss of 4 U.S. cents.
In the quarter, BlackBerry’s stock witnessed a decline of nearly 34%. However, it has since recovered some ground, recording a 13% rise and currently trading at 5.62 Canadian dollars (US$4.20) in Toronto.
Key Details to Focus On
Following its decision not to proceed with the IPO of its IoT business, BlackBerry is expected to provide further details on the completion of its deals, as well as its liquidity and cost-restructuring plans. Investors and analysts eagerly await the release of the company’s third-quarter results, scheduled for announcement on Wednesday after markets close.
Conclusion
As BlackBerry prepares to disclose its performance for the third quarter of fiscal 2024, market watchers anticipate a narrowed loss and flat revenue. The company’s decision regarding its IoT business, along with its liquidity and cost-restructuring plans, will likely be key talking points. Stay tuned for the release of the results to gain a comprehensive understanding of BlackBerry’s current position in the market.
BlackBerry Faces Challenges in Closing Deals
Investors are closely monitoring BlackBerry’s ability to close its pipeline of deals in the current quarter, as it is a significant driver of revenue growth. According to RBC’s Paul Treiber, a rebound in revenue is expected, considering management’s comments, and assuming the closure of postponed Cybersecurity deals and an increase in internet-of-things (IoT) revenue. However, there is a concern that if these Cybersecurity deals do not close or IoT fails to ramp up as expected, third-quarter results may fall short of estimates and consensus.
IoT Revenue Forecast
RBC has forecasted a 14% increase in IoT revenue quarter-over-quarter, reaching $56 million in this period. However, several OEMs, including Ford, GM, and Volkswagen, have delayed their new electric vehicle (EV) and software investments. This delay could result in a slower pace of IoT revenue ramp-up.
Restructuring Plans and Financing
After the decision to separate BlackBerry’s IoT and Cybersecurity businesses into two standalone divisions, investors are eager to learn more about the company’s restructuring plans and when they expect to break even on cash flow. With BlackBerry no longer considering an IPO for its IoT business, alternative sources of financing may need to be explored.
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