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BlackBerry (BB) Swings to Loss in Q3, Revenues Decline Y/Y
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BlackBerry Limited (BB - Free Report) reported lukewarm third-quarter fiscal 2022 (ended Nov 30, 2021) results with year-over-year top-line contraction. However, accretive design wins and partnerships with major players bode well for the Canada-based company. Sustained demand for cybersecurity and IoT products acted as a significant tailwind.
Bottom Line
On a GAAP basis, quarterly net income came in at $74 million or a loss of 5 cents per share against a net loss of $130 million or a loss of 23 cents per share in the prior-year quarter. Despite top-line contraction, the year-over-year improvement was primarily due to operating income in the reported quarter against operating loss of $127 million in the year-ago quarter.
Non-GAAP net loss was $1 million against net income of $9 million in the year-ago quarter. It reported breakeven on a per share basis compared with 2 cents per share in the prior year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
BlackBerry Limited Price, Consensus and EPS Surprise
Quarterly total revenues declined 15.6% year over year to $184 million. While revenues from Cyber Security aggregated $128 million, the same from IoT totaled $43 million. Licensing and Other contributed $13 million.
In the IoT business unit, the company is facing headwinds related to the global chip shortage. However, the segment showcased stronger-than-expected performance as a result of accretive design-related revenues in QNX business. This demonstrates BlackBerry’s industry leadership position and secular trends.
In Cyber Security, the company witnessed solid traction for the latest unified endpoint security product launches, fueled by back-to-back partnerships with major players in the market. The segment also delivered solid sequential billings and revenue growth.
Other Details
Gross profit declined to $117 million from $149 million in the year-ago quarter. Total operating expenses plunged to $66 million from $276 million. This was primarily due to a loss in the fair value adjustment of the convertible debentures. Operating income was $51 million against an operating loss of $127 million a year ago.
Cash Flow & Liquidity
In the first nine months of fiscal 2022, BlackBerry utilized $37 million of net cash in operating activities against $30 million generated in the year-ago period. As of Nov 30, 2021, the company had $271 million in cash and cash equivalents with $673 million of long-term debentures.
Q4 Outlook
BlackBerry has issued the segment outlook for fourth-quarter fiscal 2022. IoT revenues are estimated between $50 million and $55 million. Cyber Security business’ revenues are likely to be in the range of $125-$135 million. Licensing revenues are anticipated to be around $10 million for the quarter. However, the projection mark for Licensing segment might change as it is dependent on the sale of noncore portion of BlackBerry’s IP patent portfolio.
PTC Inc. (PTC - Free Report) is a better-ranked stock in the industry, sporting a Zacks Rank #1. The consensus estimate for current-year earnings has been revised 6.9% upward over the past 60 days.
PTC delivered a trailing four-quarter earnings surprise of 47.8%, on average. The stock has gained 1.3% in the past year. PTC has a long-term earnings growth expectation of 13.7%.
salesforce.com, inc. (CRM - Free Report) also flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 6.4% upward over the past 60 days.
salesforce.com delivered a trailing four-quarter earnings surprise of 44.2%, on average. It has returned 11.1% in the past year. CRM has a long-term earnings growth expectation of 16.8%.
ANSYS, Inc. (ANSS - Free Report) is another solid pick for investors, carrying a Zacks Rank #2 (Buy). The consensus estimate for current-year earnings has been revised 2.4% upward over the past 60 days.
ANSYS delivered a trailing four-quarter earnings surprise of 22.7%, on average. It has gained 9.4% in the past year. ANSS has a long-term earnings growth expectation of 11.9%.
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BlackBerry (BB) Swings to Loss in Q3, Revenues Decline Y/Y
BlackBerry Limited (BB - Free Report) reported lukewarm third-quarter fiscal 2022 (ended Nov 30, 2021) results with year-over-year top-line contraction. However, accretive design wins and partnerships with major players bode well for the Canada-based company. Sustained demand for cybersecurity and IoT products acted as a significant tailwind.
Bottom Line
On a GAAP basis, quarterly net income came in at $74 million or a loss of 5 cents per share against a net loss of $130 million or a loss of 23 cents per share in the prior-year quarter. Despite top-line contraction, the year-over-year improvement was primarily due to operating income in the reported quarter against operating loss of $127 million in the year-ago quarter.
Non-GAAP net loss was $1 million against net income of $9 million in the year-ago quarter. It reported breakeven on a per share basis compared with 2 cents per share in the prior year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
BlackBerry Limited Price, Consensus and EPS Surprise
BlackBerry Limited price-consensus-eps-surprise-chart | BlackBerry Limited Quote
Revenues
Quarterly total revenues declined 15.6% year over year to $184 million. While revenues from Cyber Security aggregated $128 million, the same from IoT totaled $43 million. Licensing and Other contributed $13 million.
In the IoT business unit, the company is facing headwinds related to the global chip shortage. However, the segment showcased stronger-than-expected performance as a result of accretive design-related revenues in QNX business. This demonstrates BlackBerry’s industry leadership position and secular trends.
In Cyber Security, the company witnessed solid traction for the latest unified endpoint security product launches, fueled by back-to-back partnerships with major players in the market. The segment also delivered solid sequential billings and revenue growth.
Other Details
Gross profit declined to $117 million from $149 million in the year-ago quarter. Total operating expenses plunged to $66 million from $276 million. This was primarily due to a loss in the fair value adjustment of the convertible debentures. Operating income was $51 million against an operating loss of $127 million a year ago.
Cash Flow & Liquidity
In the first nine months of fiscal 2022, BlackBerry utilized $37 million of net cash in operating activities against $30 million generated in the year-ago period. As of Nov 30, 2021, the company had $271 million in cash and cash equivalents with $673 million of long-term debentures.
Q4 Outlook
BlackBerry has issued the segment outlook for fourth-quarter fiscal 2022. IoT revenues are estimated between $50 million and $55 million. Cyber Security business’ revenues are likely to be in the range of $125-$135 million. Licensing revenues are anticipated to be around $10 million for the quarter. However, the projection mark for Licensing segment might change as it is dependent on the sale of noncore portion of BlackBerry’s IP patent portfolio.
Zacks Rank & Stocks to Consider
BlackBerry currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PTC Inc. (PTC - Free Report) is a better-ranked stock in the industry, sporting a Zacks Rank #1. The consensus estimate for current-year earnings has been revised 6.9% upward over the past 60 days.
PTC delivered a trailing four-quarter earnings surprise of 47.8%, on average. The stock has gained 1.3% in the past year. PTC has a long-term earnings growth expectation of 13.7%.
salesforce.com, inc. (CRM - Free Report) also flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 6.4% upward over the past 60 days.
salesforce.com delivered a trailing four-quarter earnings surprise of 44.2%, on average. It has returned 11.1% in the past year. CRM has a long-term earnings growth expectation of 16.8%.
ANSYS, Inc. (ANSS - Free Report) is another solid pick for investors, carrying a Zacks Rank #2 (Buy). The consensus estimate for current-year earnings has been revised 2.4% upward over the past 60 days.
ANSYS delivered a trailing four-quarter earnings surprise of 22.7%, on average. It has gained 9.4% in the past year. ANSS has a long-term earnings growth expectation of 11.9%.