BlackBerry (BB) Q1 Earnings and Revenues Surpass Estimates
BlackBerry (BB) achieved quarterly earnings of $ 0.02 per share, exceeding the Zacks Consensus estimate of a loss of $ 0.02 per share. This corresponds to earnings of $ 0.01 per share a year ago. These figures are adjusted for one-time effects.
This quarterly report corresponds to a profit surprise of 200%. A quarter ago, this cybersecurity software and services company was expected to make a profit of $ 0.04 per share if it actually did make a profit of $ 0.09, a surprise of 125%.
The company has exceeded EPS consensus estimates three times in the past four quarters.
BlackBerry, which is part of the Zacks wireless industry outside of the United States, had sales of $ 214 million in the quarter to May 2020, exceeding the Zacks Consensus estimate by 2.39%. This corresponds to sales of $ 267 million in the previous year. The company has only exceeded consensus sales estimates once in the past four quarters.
The sustainability of the stock's immediate price move based on the recently released numbers and future earnings expectations will depend primarily on management's comments on the call for earnings.
The BlackBerry share has lost around 20.6% since the beginning of the year, while the S&P 500 declined by -3.1%.
What's next for BlackBerry?
While BlackBerry has underperformed the market so far this year, investors are faced with the question: How is the stock doing?
There are no easy answers to this key question, but one reliable measure that can help investors fix this is the company's earnings prospects. This includes not only the current consensus expectations for the coming quarters, but also how these expectations have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in revisions of earnings estimates. Investors can track such revisions themselves or rely on a proven rating tool such as the Zacks Rank, which has an impressive track record of leveraging the opportunities for revisions to profit estimates.
Prior to this publication of the results, the trend towards the estimated revision of BlackBerry was favorable. While the extent and direction of the estimated revisions may change after the company's recently released earnings report, the current status leads to a Zacks rank 2 (buy) for the stock. Therefore, the stocks are expected to outperform the market in the near future. The full list of today's Zacks # 1 Rank (Strong Buy) stocks can be found here.
It will be interesting to see how the estimates for the coming quarters and the current financial year will change in the coming days. The current EPS consensus estimate is $ 213 million in sales for the coming quarter and $ 0.05 in sales for the current fiscal year.
Investors should be aware of the fact that the outlook for the industry can also have a significant impact on the performance of the stock. In terms of the Zacks industry rank, Wireless Non-US is currently in the top 41% of the over 250 Zacks industries. Our research shows that the top 50% of the Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.
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