BlackBerry (BBRY) Stock: Don’t Count Them Out Just Yet

BlackBerry Ltd (NASDAQ: BBRY) is having a pretty strong day in the market today, and a much needed one after Friday’s earnings report led to steep declines. The gains are for a relatively good reason. The reality of the matter is that while revenue missed the mark, earnings were positive, and if the company’s CEO is right, it is about to break out in a big way. At the moment (11:16), BBRY is trading at $10.03 per share after a gain of $0.32 per share or 3.30% thus far today.

What We Saw From The BBRY Earnings Report

As mentioned above, BlackBerry released its earnings report on Friday, and while the data was mixed, the reaction was abundantly negative. Here’s what we saw from the report…

  • Earnings – In terms of earnings per share, BBRY actually did pretty well. During the quarter, the company generated earnings in the amount of $0.02 per share. This came in ahead of the analyst projections. In fact, analysts expected that the company would break even.
  • Revenue – While earnings proved to be positive, revenue proved to be a major concern. At the end of the day, analysts expected that the company would produce $264.4 million in revenue, but they only reported $244 million.

While revenue was down, John Chen, CEO at BBRY says that the company is likely to breakout soon. Here’s what he had to say in a recent comment to CNBC… If you follow the company for a while, you know that we are about to break out and do some investment in growth. That’s part of our big plan here.

We will be doing acquisitions… If you follow the company for a while, you know that we are about to break out and do some investment in growth. That’s part of our big plan here.

The new era of machine learning, as related to cybersecurity – we’re already a leader in that space… We really would like to add more capability and features there. That’s part of it.

Anything that we could apply back to both our automotive business as well as our enterprise business, as we talked about… And the other area is expanding the channel and the reach for our auto business. We have a very commanding lead in the market for auto software … We’ve got to expand our footprint in reaching much more globally.”

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You Can’t Count BlackBerry Out

While the decline in revenue proved to be concerning to investors, I’ve been following the company for a while now, and I’m not concerned. The bottom line is that for some time now, BBRY has been working to move away from the handset space and into the software space, and they’ve done an incredible job thus far. In particular, the way they have commanded dominance over auto-related software is compelling to say the least.

Now, we know that BBRY is going to go on a bit of a spending spree, but an educated one. Chen knows what he’s talking about when he says that Artificial Intelligence is the next big thing, and he knows what to look for in terms of acquisitions. While the road growth is likely going to be a bit of a bumpy one, there’s a strong argument that BBRY will be headed for the top soon enough!

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