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What's in Store for BlackBerry (BBRY) in Q3 Earnings?

BlackBerry LimitedBBRY is set to release third-quarter 2016 financial results before the market opens on Dec 18.

In the last quarter, the company posted a negative 85.71% earnings surprise. Let's see how things are shaping up for this announcement.

Factors at Play

Recently, BlackBerry launched its much-awaited Android-based handset PRIV. The device has already witnessed significant market response and is expected to mitigate losses at the company's smartphone business.

Also, BlackBerry's BES12 platform is increasingly gaining traction among enterprise customers. Furthermore, the company's cost-cutting initiatives coupled with a strong cash position have encouraged the company to acquire a few businesses over the last one year.

Recently, BlackBerry wrapped up the acquisition of AtHoc - a provider of networked crisis communications service. The AtHoc acquisition will significantly boost BlackBerry's alternative business by helping clients share critical information within an organization, in a secure manner.

BlackBerry also completed the takeover of WatchDox, a data security company which delivers secure enterprise file-sync-and-share (EFSS) solutions on devices.

However, lack of a new product launch, decline in smartphone sales, mounting debts, stiff competition from leading handset makers and enterprise security management companies will continue to impede growth for BlackBerry.

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 (Strong Buy), #2 (Buy) or at least #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at a loss of 20 cents. Hence, the ESP is 0.00%.

Zacks Rank: BlackBerry carries a Zacks Rank #3. While this increases the predictive power, we also need to have a positive ESP to be confident of an earnings surprise.

Meanwhile, we caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

The Walt Disney Company DIS has an earnings ESP of +2.07% and a Zacks Rank #2.

Virgin America Inc. VA has an earnings ESP of +5.15% and a Zacks Rank #3.

United Continental Holdings, Inc. UAL has an earnings ESP of +3.95% and a Zacks Rank #3.

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DISNEY WALT (DIS): Free Stock Analysis Report

UNITED CONT HLD (UAL): Free Stock Analysis Report

BLACKBERRY LTD (BBRY): Free Stock Analysis Report

VIRGIN AMERICA (VA): Free Stock Analysis Report

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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 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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