BlackBerry (BBRY) Stock Drops: Q1 Loss Wider Than Expected

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BlackBerry Limited (BBRY) shares are down about 7% in the pre-market session Friday following the company’s wider than expected loss in its first-quarter fiscal 2017, which was driven by a tumble in revenue.

In its quarterly report, the beleaguered Canadian handset manufacturer said it earned $0.00 per share, well above the ($0.08) per share analysts were expecting. Revenues however, fell 39.2% year-over-year to $400 million, sharply below views for $470.82 million. Quarterly operating loss came in at $655 million ; a significant number when compared to a profit of $89 million in the year-ago quarter. Non-GAAP software and services revenue of $166 million in Q1 was slightly above the $160 million analyst estimate.

“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”, said in a statement John Chen, Executive Chairman and CEO, BlackBerry.

Profitability-wise, BBRY has a t-12 profit and operating margin of (9.63%) and (6.48%), respectively. The $3.65 billion market cap company reported $1.2 billion in cash and cash equivalents vs. $1.25 billion in debt in its most recent quarter.

For the full fiscal year 2017, BlackBerry provided EPS guidance of ($0.15) ex items versus consensus of ($0.33) per share. The company also said it expects to achieve 30% revenue growth in software and positive free cash flow for the year.

The Bottom Line

BBRY currently prints a one year loss of about 21%, and a year-to-date loss of around 25%. The median Street price target on the name is $7.80 with a high target of $11.00. Currently, ticker boasts 3 ‘Buy’ endorsements, compared to 15 ‘Holds’ and 4 ‘Sell’.

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