It has been about a month since the last earnings report for BlackBerry (BB Quick QuoteBB - Free Report) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is BlackBerry due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

BlackBerry Swings to Loss in Q3, Revenues Fall Y/Y

BlackBerry reported tepid third-quarter fiscal 2023 (ended Nov 30, 2022) results, with the top line contracting year over year. Nonetheless, accretive design wins and partnerships with major players bode well for the Canada-based company. The sustained demand for IoT products is a significant tailwind.

The company reported an adjusted loss per share of 5 cents against the prior-year quarter’s breakeven earnings per share. The Zacks Consensus Estimate was pegged at a loss of 7 cents per share. Quarterly total revenues declined 8.2% year over year to $169 million.

Quarter in Details

Revenues from Cyber Security totaled $106 million, down 17.2% year over year. Revenues from IoT totaled $51 million, up 19% year over year. Licensing and Other contributed $12 million, down from $13 million a year ago.

Software and Services revenue declined 8.2% year over year to $157 million.

In the IoT business unit, the company’s QNX platform secured nine new design wins in Auto and 15 in the General Embedded Market.

In the fiscal third quarter, the company announced the expansion of its BlackBerry SecuSUITE partner network in the Asia Pacific by adding three new highly-specialized companies. The expansion will assist businesses and governments in more efficiently securing mobile communications and safeguarding people and operations.

Within the auto sector, increasing consolidation of digital cockpits augurs well for BlackBerry. In the reported quarter, the company announced a collaboration with Shanghai Dayin Technology to develop BlackBerry’s QNX acoustics technology that will power the intelligent cockpit for Jiayu Technology and will be deployed in Great Wall Motors’ premium WEY Mocha, Latte and Macchiato vehicle lines.

The company also announced that it is launching Cyber Threat Intelligence in December 2022. The product provides its users with professional threat intelligence services to tackle cyber threats.

In addition, it announced an extension of its use of Amazon Web Services to further develop its QNX technology. The company’s QNX technology will be available in the cloud for developers and will aid them in accelerating the time-to-market for mission-critical embedded systems.

Other Details

Gross profit decreased 6.8% from the year-ago quarter to $109 million. The gross margin improved marginally to 64.5% from 63.6%.

Total non-GAAP operating expenses were $137 million. The adjusted operating loss was $28 million compared with an adjusted operating loss of $24 million a year ago. Adjusted EBITDA loss came in at $22 million compared with an adjusted EBITDA loss of $8 million reported in the year-ago quarter.

Cash Flow & Liquidity

For the quarter under review, BlackBerry utilized $185 million of net cash in operating activities. For the nine months ended Nov 30, 2022, BlackBerry utilized $253 million of net cash in operating activities compared with $37 million in the prior year period.

As of Nov 30, 2022, BlackBerry had $255 million in cash and cash equivalents.

Outlook

For fiscal 2023, BlackBerry expects IoT revenues in the range of $205-$210 million, indicating 15-18% growth year over year. Cyber business billings growth is expected within 8-12% due to increased uptake of security products.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -7.14% due to these changes.

VGM Scores

Currently, BlackBerry has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, BlackBerry has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

BlackBerry belongs to the Zacks Computer - Software industry. Another stock from the same industry, Oracle (ORCL Quick QuoteORCL - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended November 2022.

Oracle reported revenues of $12.28 billion in the last reported quarter, representing a year-over-year change of +18.5%. EPS of $1.21 for the same period compares with $1.21 a year ago.

For the current quarter, Oracle is expected to post earnings of $1.19 per share, indicating a change of +5.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.

Oracle has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.