BlackBerry (NASDAQ:BBRY) is having an incredibly rough start to the day today after the company reported its earnings for the fiscal fourth quarter of 2015. While the company's performance was relatively strong with regard to earnings, revenue missed the mark and investors seem to be holding onto that; sending the stock downward. 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. So, let's get right to it...
BBRY Reports Q4 Earnings
As mentioned above, BBRY recently reported its earnings for the fourth quarter. While there was some good, there was also some bad. Here's what we saw from the report...
- Earnings Per Share – In terms of earnings per share, BlackBerry had an overwhelmingly positive quarter. During the fourth quarter, analysts expected that the company would produce a loss in the amount of $0.10 per share. However, the company beat those expectations by $0.07 per share, reporting a narrow loss of just $0.03 per share.
- Revenue – While earnings were overwhelmingly positive, revenue definitely missed the mark. During the quarter, analysts expected that BBRY would generate revenue in the amount of $563.18 million. However, the company actually reported revenue far less, only producing $464 million in the quarter.
As you can see from the data above, earnings was overwhelmingly positive, and in most cases, that will get investors to push the stock in the right direction. However, a nearly $100 million miss with regard to revenue is giving investors cold feet. Nonetheless, BBRY CEO and Executive Chairman, John Chen had the following to say about the results in the quarter:
Overall, BlackBerry's Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow... We have clearly gained traction and market share in enterprise software. We more than doubled our software and licensing revenue in Q4 and exceeded our target of $500 million for the full year. Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives...
How The Market Reacted To The News
In most cases, when a publicly traded company produces profits that are higher than what analysts expect to see, we can expect to see growth in the value of the stock. However, in the case of BlackBerry, that isn't the case today. Unfortunately, the company widely missed expectations with regard to top-line revenue. As a result, investors seem to be holding onto the miss and not paying attention to the positive; sending the value of the stock downward. Currently (8:30), BBRY is trading at $7.57 per share after a loss of $0.52 per share or 6.43% thus far today.
What We Can Expect To See Moving Forward
First and foremost, I'd like to say that I'm still a BBRY bull. The truth is that revenue could have been better, but all in all, I see the company's earnings report as relatively positive. Earnings blew away expectations. On top of that, there was key data with regard to enterprise software that shows that the company is on the right track there. All in all, I'm expecting to see the company move into profitability relatively soon, and when that happens, we're going to see strong gains on BBRY. All in all, I'm expecting to see quite a bit of positivity moving forward.