BlackBerry earnings for the May quarter fell from a year earlier but met expectations as revenue edged by Wall Street targets. BlackBerry stock fell as Canaccord Genuity and CIBC downgraded the company following the earnings report.
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Canada-based BlackBerry (BB) reported fiscal first-quarter earnings late Thursday. BlackBerry posted a 5-cent loss on an adjusted basis for the quarter ending May 31.
Revenue fell 16% to $174 million, including $107 million in cybersecurity sales and $43 million in “Internet of Things” sales, the company said. IoT revenue includes automotive software.
Analysts expected BlackBerry to report a 5-cent per-share loss on revenue of $171.3 million. In the year-earlier quarter, Blackberry stock earned 2 cents per share on revenue of $206 million.
BlackBerry stock fell 5.5% to 11.98 in early action on the stock market today. In Thursday’s regular session, shares fell 3.5%.
BB Stock Downgraded On Valuation
“Cybersecurity revenue fell 12% quarter-over-quarter to $107 million,” said RBC Capital analyst Paul Treiber in a report. “Management sees cybersecurity revenue at the low-end of fiscal 2022 guidance for $495 million to $515 million as new sales investments take time to ramp up.”
Canaccord Genuity downgraded BlackBerry stock to sell from hold. CIBC downgraded the stock to under-perform from neutral.
The company is in talks to sell its intellectual property portfolio. BlackBerry garners about 30% of revenue from intellectual property fees.
“Should management reach a deal to sell the licensing business, we believe this could help unlock value and provide a capital infusion to drive accelerated software and services growth,” said Canaccord Genuity analyst Michael Walkley in a report.
“While we believe management has created a cogent long-term strategy and the business is turning the corner toward stronger trends, we await more proof in execution on the new product roadmap, evidence of cross-selling opportunities emerging, growing overall software and services revenue, and the potential for upside to our estimates before becoming more constructive on the shares.”
Blackberry Stock: Intellectual Property Sale Expected
Blackberry stock has gained some 92% in 2021, though shares retreated heading into the fiscal first-quarter earnings report. Investors using social media have driven BB stock and other so-called meme stocks higher, including AMC Entertainment (AMC), GameStop (GME) and Clover Health (CLOV).
Here’s an in-depth look at BB stock, using IBD technical and fundamental analysis.
A one-time leading maker of mobile devices, BlackBerry was a driving force in pagers and cellphones. But its hardware business collapsed in 2008 amid competition from Apple (AAPL) iPhones and Android devices.
BlackBerry pivoted to mobile security software under Chief Executive John Chen. Also, BlackBerry has been a provider of software in the automotive market for entertainment and mapping programs.
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns for companies like BlackBerry stock is one key to the investment guidelines.
IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watch lists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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