All that has to be said Regarding the Surprise Profit of BlackBerry Ltd. (NASDAQ:BBRY)


Before the markets opened on Friday, BlackBerry Ltd. (NASDAQ:BBRY) announced its Q4 earnings along with the earnings of fiscal 2015. The company had earned a diluted EPS amounting to $0.04 for the $660 million revenues. Last year during the same period, the company made a loss for each share amounting to $0.08 for its $976 million revenue.

The Q4 results of the company are compared to its consensus estimate loss per share at $0.05 with revenue of $786.42 million. The company had made revenue of $3.3 billion for the whole year with a loss amounting to $0.09/share compared to the $6.81 billion revenue and $1.35 net loss for the year before. Analysts thought that the loss per share would be somewhere near $0.16 for $3.47 billion revenues.

With a GAAP basis, the Q4 EPS of the company amounted to $0.05 contrasted to the loss per share at $0.80 for 2013’s Q4. The adjusted net-income amounted to $20 million with the GAAP net income at $28 million. The adjustments were inclusive of $108 million charges for its restructuring and debenture charges. There was also a $115 million amount of investment income from the Rockstar business sale.

Hardware revenue for the company’s sales was 1.3 million in phones to distribution channels which were down in the quarter from the previous 2 million to the one before. The units of sell through amounted to 1.6 million with a 1.9 million sequential decline. The selling price average for these phones increased from the previous $180 for the Q3 to the new $211 amount to the Q4.

The company made free cash flows amounting to $76 million for this quarter which was much better than its outflow of cash amounting to $784 million for the previous year.

There is ongoing effort in the company in order to expand distribution capability. There is a target on the sustainable profitability of non-GAAP in 2016. This is sort of similar to the company’s outlook of the previous quarter’s end.

The company’s consensus for its Q1 of 2016 stands at a loss per share amounting to $0.03 and its revenues are at $813.76 million. Analysts think that the company will have a loss per share amounting to $0.09 for revenues at $3.28 billion.

The profit will definitely surprise investors; however hardware sales may cause revenue to remain modest. Therefore the conclusion might as well be that the company had reached this point through effective cost cutting methods.

Purchase orders totaled $394 million when Q4 ended as reported by the company. This amount was $565 million lower sequentially. This goes to show you that hardware sales are likely going to fade. A positive point is that there are 48.8% of adjusted gross margins which is why the selling price is higher compared to the lower amount of costs.

The company’s consensus target price amounted to $9.15. The company’s stock closed Thursday at $9.30 which was down from the day before the company had announced its Q3 earnings in December.

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