On Dec 24, we issued an updated research report on Canadian handset maker BlackBerry Ltd. BBRY. Notably, the company expects to generate positive free cash flow and adjusted EBITDA in fiscal 2016.
BlackBerry recently reported third-quarter fiscal 2016 financial results wherein both the top and the bottom line surpassed the Zacks Consensus Estimate.
The company has performed exceedingly well in the quarter reporting a sequential revenue increase for the first time after nine consecutive quarters of decline. Moreover, revenues at the Software and technology licensing segment improved 183% year over year.
BlackBerry recently launched its much-awaited Android-based handset PRIV. The device is much in demand and is expected to mitigate losses at the company’s smartphone business.
Meanwhile, ever since Apple Inc.’s AAPL iPhone hit the market, BlackBerry and Nokia Corp. NOK have been facing intense competitive pressure. The situation got worse with the launch of Alphabet Inc.’s GOOG Android software, which was an instant hit.
However, to offset the escalating losses at its smartphone business as well as to fend off competitive threats, BlackBerry is gradually shifting focus to software and is continuously utilizing its cash reserves to acquire companies. Moreover, the company’s BES12 software platform is gaining considerable traction among corporate clients. In order to target the automotive and asset tracking industries and to add a revenue stream, BlackBerry also recently launched the Internet of Things (IoT) platform.
Meanwhile, the company has taken over mobile security firm Good Technologies Ltd. to strengthen its position in the Enterprise Mobility Management service space. Recently, BlackBerry also closed the AtHoc deal. We believe that these acquisitions will continue to consolidate its software business moving ahead.
Currently, BlackBerry sports a Zacks Rank #1 (Strong Buy).
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