Can BlackBerry Be Trusted?

Can BlackBerry Be Trusted?

Shares of BlackBerry (NASDAQ: $BBRY) are trading up as much as 6% this morning after the company reported a surprise fiscal fourth-quarter earnings beat.

The company posted a net loss of $423 million, or 80 cents a share, from a year-earlier profit of $98 million, or 19 cents a share.

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Adjusted per-share loss from continuing operations was $42 million, or 8 cents a share. Fourth-quarter revenue slid 64% to $976 million. BlackBerry said it sold about 3.4 million smartphones in the period, including about 2.3 million BlackBerry 7 models.

Analysts polled by FactSet had expected a loss of 56 cents on sales of $1.17 billion. On the report, Chief Executive John Chen said:

“I am very pleased with our progress and execution in fiscal Q4 against the strategy we laid out three months ago.”

BlackBerry recently updated its management software to include additional features for Apple (NASDAQ: $AAPL) and Google‘s (NASDAQ: $GOOG) Android phones, and also to support Microosft‘s (NASDAQ: $MSFT) Windows Phone. At the same time, many large corporations still operate BlackBerry Enterprise Servers to support the dwindling number of BlackBerrys used by their employees.

[Read: Microsoft Just Released Office For The iPad]

While BlackBerry’s latest software, BlackBerry Enterprise Server 12, still lacks some iPhone and Android features, Jack Gold, the principal analyst at J. Gold Associates, said it was nevertheless competitive. “It’s good,” Mr. Gold said. “Is it the best? It’s hard to say.”

One of the biggest challenges for BlackBerry is its image — that of a slow-footed company bleeding cash. Persuading corporations that its software is a safe investment will be a tough job for Mr. Chen.

There are still uncertainties, however.  While I’m willing to give the company the credit it deserves for its recent rebound, BlackBerry has been too far behind to fully complete the task. 

For now, investors have to ask themselves, how much higher can the stock go?

Tell me your thoughts in the comments section and I’ll respond.

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  • damion

    We debated this stock during the last bull run this stock entered and i remember you saying that if it ever got to $15 it would get beaten down. You were right, yet $BBRY looks like such a low risk stock when you look at the mobile space and the shift towards privacy. Even thought of taking a small speculative position on Earnings but chickened out. I say bought out for $12-$15 range by Samsung, Apple, Google but not Facebook.

    • http://wallstplaybook.com/ Richard Saintvilus

      The question is, what does BlackBerry offer that Apple or Samsung doesn’t already have? At one point it was the security. But enterprises are taking care of that themselves. What services does BlackBerry offer that would add incremental value to either Apple of Samsung? I don’t see it.

      Same thing with Google, given that it has Motorola’s patents. And the Motorola acquisition has not benefited Google in any meaningful way. So they may be hesitant about taking another chance on a failing handset business. Facebook is interesting, though.

      But when I think of a great fit for BlackBerry, I think of a company like Lenovo. And it would make perfect sense for either Hewlett-Packard or Dell, which have struggled with their own mobile attempts.

      Oh, by the way, you were the first to comment on this article. You’ve earned a free WSPB T-shirt. I’ll get details from you privately. Congrats :-)

      • damion

        The main reason I would say those three businesses is due to it being a purely defensive play with little risk. The smartphone industry is beginning to plateau and a purchase by the big 3 would keep others from entering the space. Facebook already made an attempt at a phone which has almost been erased from consumer’s minds. Margins will only continue to be compressed if further players enter the ring. Lenevo is a Chinese company and i doubt that Canada would let its Country’s former prodical child be sold to the Chinese.

        • http://wallstplaybook.com/ Richard Saintvilus

          BlackBerry is a public company. All Lenovo has to do is buy all of BlackBerry’s outstanding shares. There isn’t anything the Canadian government can do to stop them.