BlackBerry (BBRY) Stock Gains On Strong Earnings

BlackBerry Ltd (NASDAQ: BBRY)

BlackBerry is having an incredibly strong start to the trading session today, and for good reason. The company reported earnings for the first quarter before the opening bell today, blowing away expectations. Today, we’ll talk about what we saw from earnings, how the market reacted to the news, and what we can expect to see from BBRY moving forward.

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BBRY Reports Strong Earnings

As mentioned above, BlackBerry is having a strong day in the market today after reporting strong earnings. Here’s what we saw from the report:

  • Earnings Per Share – In terms of earnings per share, BBRY definitely did not disappoint. During the quarter, analysts expected that the company would generate a loss in the amount of $0.08 per share. However, the company actually reported flat earnings, coming in at $0.00 per share and beating analyst expectations in a big way.
  • Revenue – While BBRY did incredibly well when it comes to earnings, in terms of revenue, the company missed expectations. During the first quarter, analysts expected that the company would generate revenue in the amount of $470.94 million. However, the company actually reported earnings in the amount of $424 million, well below analyst expectations.

As you can see from the information above, the earnings report left relatively mixed emotions. With strong earnings but weak revenue, investors needed to look toward company comments for a clear picture of how the quarter actually went and what to expect moving forward. In this particular case, the comments from John Chen, Executive Chairman and CEO at BBBRY, were overwhelmingly positive. Here’s what he had to say:

BlackBerry is differentiated by cross-platform market leadership in software, an end-to-end secure mobility platform and a strong financial foundation. Our Q1 results highlight these attributes. Excluding IP licensing, we have more than doubled our software revenue on a year-over-year basis for the second consecutive quarter, driven by our EMM, secure messaging and QNX embedded software businesses. In our Mobility Solutions business, our objective is to achieve operating profitability in the short term…

Our current plan calls for continued investments to expand our addressable markets and drive sustainable profitability and revenue growth. For the full fiscal year, we are on track to deliver 30 percent revenue growth in software and services. Based on a more efficient operating model, we expect a non-GAAP EPS loss of around 15 cents, compared to the current consensus of a 33 cent loss. We also expect to generate positive free cash flow for the full year.”

How The Market Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with the company as a result. The data released today with regard to BBRY was overwhelmingly positive in the end. As a result, we’re seeing gains in the market surrounding the stock. Currently (9:35), BlackBerry stock is trading at $6.94 per share after a gain of $0.20 per share, or 2.96%, thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from BBRY. The reality is that, while the company fell on its face when it came to smartphones, we’ve seen quite a few big changes over the years. I believe that the company’s push toward a software enterprise is a strong move. Not to mention, the creation of BlackBerry phones that use the Android operating system will likely help with profitability as well. All in all, things seem to finally be going in the right direction for BBRY.

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What Do You Think?

Where do you think BBRY is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!

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