Editor's note: This piece was originally published on March
26, 2013 at 8:16 am EST.
If BlackBerry (NASDAQ:
) hasn't made enough news over the past couple of trading days,
it's about to make more. Before the opening bell Thursday, the
company will announce Q4 earnings. Here's what you need to know
before the announcement.
BlackBerry is expected to report to investors what it is we
are all supposed to call it. Analyst consensus is BlackBerry but
the company could surprise with Research in Motion until the name
is legally changed. But, seriously, street consensus has EPS at
-$0.39 with revenue estimates at $2.84 billion.
That's down 38 and 32 percent respectively year over year. If
Research in Motion/BlackBerry sees a bounce from Thursday's
earnings, it's proof that the actual number isn't as important as
the degree to which it beats the expectation.
Analyst and Commentary
In his report titled, BlackBerry…Could Get Better before
Getting Worse, Daniel Ernst of Hudson Square Research said, "We
expect BlackBerry to report a mixed 4Q13…and believe margins and
subscriber trends could both surprise in either direction."
Sterne Agee said, "We anticipate the company to meet or beat
consensus given BB10 momentum and a low bar where expectations
are for sizable year over year declines in both revenue and EPS.
However, we remain on the sidelines…"
It's All About the Phone
BlackBerry was widely seen as the JC Penney (NYSE:
) of the cellphone space but when it launched its BB10 operating
system, there was excitement in the air giving the stock more
reason to move higher. Up over 115 percent in the past six
months, investors breathed new life into the stock banking on the
fact that the phone didn't have to dethrone Google (NASDAQ:
) or Apple (NASDAQ:
). A strong third might be enough.
Analysts have their doubts. Sterne Agee said, "So far, the
feedback we have gotten indicates buyers are longtime loyalists
as opposed to new customers. It remains to be seen if BB10 can
gain mainstream acceptance against Android and iOS."
A Morgan Stanley research note said, "We continue to believe
BBRY is unlikely to emerge as a strong third OS and that BB10
primarily sells into existing BB7 users, not Android, or iOS
Or is it about the Phone?
Jefferies doesn't think it's as much about the phone as people
think. In a research note, Peter Misek said that the street is
missing the opportunities in BlackBerry's mobile device
management system. In corporate environments where employees can
use their own mobile devices, security and integration is a
concern. The BlackBerry Enterprise Service 10 is the company's
answer to corporate device management.
Misek said, "We believe AT&T [(NYSE:
)] will heavily support BES10 with it possibly becoming
AT&T's preferred MDM partner across all channels. We think
BBRY's MDM software will gain traction throughout this year and
see a significant ramp in revenues next year."
Everybody knows that the fundamentals are about as impressive
as New Mexico was in the NCAA tournament last week but BlackBerry
does have at least one major positive going for it: its
While volatile, the stock has participated in the market rally
(unlike Apple). It has held its 50 DMA through all of its
volatility and formed higher highs and higher lows. With Monday's
sell off, technical damage was done as it finally fell below its
50 DMA but one day doesn't make a trend. It also finished one
cent above its 20 DMA at $14.23.
If it can hold that level, technicians would consider that a
bullish sign. If it breaks below that level, the next stop is
significantly lower at $12.58.
BlackBerry has proven that it's a stock where anything can
happen. The risk/reward going into earnings would suggest staying
on the sidelines.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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