Blackberry Limited (BBRY): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


BlackBerry reported narrower than expected loss in the second-quarter of fiscal 2015. Revenues were in line with the Zacks Consensus Estimate. Declining smartphone sales, stiff competition from handset manufacturers, lackluster operating platform and a change in business model will continue to act as headwinds for the company. However, a healthy balance sheet, an extensive patent portfolio, launch of the BES12 platform, presence in over 147 countries, the partnership with Foxcon and the agreement with Secusmart are likely to foster growth while moving ahead. Moreover, implementations of effective cost-control measures, divestiture of unprofitable units and targeting the highly populated markets of India and China will not only drive margins but will also boost cash flow going forward. Hence, we maintain our Neutral recommendation on the company.


BlackBerry Limited (BBRY), headquartered in Waterloo, Ontario (Canada), designs, manufactures, and sells wireless solutions to the mobile communications market. Through the development and integration of hardware, software, and services, BlackBerry provides solutions for seamless access to time-sensitive information, including e-mail, messaging, as well as Internet and Intranet-based applications. The company's offerings also enable third-party developers and manufacturers to enhance their products and services with proprietary wireless connections. BlackBerry's product portfolio includes the BlackBerry line of wireless email devices, embedded radio modems and software development tools.

The company reports in three business segments as follows:

Hardware: This segment offers a wide range of BackBerry smartphones. These are communication tools that use wireless, push-based technology to deliver both business and consumer applications to mobile users. The segment accounted for 60% of the total revenue in fiscal 2013.

Services: This segment is related to the monthly access billing charges to the company's carrier partners, based on BlackBerry's subscriber account base. BlackBerry's service revenues are generated by charging a monthly infrastructure access fee to a carrier or reseller, who in turn, bills the end customer. The segment generated around 35% of the total revenue in fiscal 2013.

Software and Other: Software revenues include fees from licensed BlackBerry Enterprise Server software and BlackBerry Client Access Licenses, BlackBerry Solution Services and upgrades. In addition, this segment also generates revenues from both BlackBerry Professional Software and BlackBerry mobile-voice services. Other revenues are generated from BlackBerry technical support services, non-warranty repairs and maintenance program, and some non-recurring engineering revenues based on the completion of specific contracts. The segment generated around 5% of the total revenue in fiscal 2013.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: BBRY

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