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Can BlackBerry (BBRY) Surprise this Earnings Season? - Analyst Blog

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Canadian handset manufacturer BlackBerry Limited ( BBRY ) is scheduled to report second-quarter fiscal 2015 financial numbers before the opening bell on Sep 26, 2014.

In the last reported quarter, the company had delivered an impressive 59.3% positive earnings surprise. Let's see how things are shaping up for this announcement.

Factors Likely to Influence this Quarter

Declining smartphone sales, stiff competition from handset manufacturers, escalating marketing expenses and operating expenses are potent headwinds facing the company. In the previous quarter, BlackBerry sold 2.6 million smartphones, down a massive 62% year over year and also significantly behind Samsung's 85 million and Apple's 44 million.

To counter intensifying competition from Android devices, BlackBerry struck a licensing deal with Amazon.com Inc. (AMZN) in June to bring the latter's app-store to customers using the BlackBerry 10.3 operating system. This deal has opened up new avenues for BlackBerry 10 users who can now access over 240,000 Android applications through the Amazon Appstore, including popular ones like Groupon, Netflix, Minecraft, Pinterest and Candy Crush Saga.

Moreover, in May 2014, the company started shipping budget friendly full-touch Z3 smartphones. Z3 is a joint effort by BlackBerryand Foxconn - which supplies cheaper inventories for the manufacturing of smartphones. Such strategic decisions may improve the Canadian device maker's sales and profits in the coming quarters.

Earnings Whispers?

Our proven model does not conclusively show that BlackBerry is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP : BlackBerry's Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at a loss of 16 cents.

Zacks Rank : BlackBerry carries a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.

Notably, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Other Stocks to Consider

Here are some other companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

CenturyLink, Inc. ( CTL ), with earnings ESP of +3.23% and a Zacks Rank #3 (Hold).

Windstream Holdings, Inc. ( WIN ), with earnings ESP of +20.0% and a Zacks Rank #3.

United States Cellular Corporation ( USM ), with earnings ESP of +129.63% and a Zacks Rank #3.

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CENTURYLINK INC (CTL): Free Stock Analysis Report

WINDSTREAM HLDG (WIN): Free Stock Analysis Report

US CELLULAR (USM): Free Stock Analysis Report

BLACKBERRY LTD (BBRY): Free Stock Analysis Report

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Zacks Investment Research

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


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

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