BlackBerry’s Fiscal Q4 Report: Top and Adjusted Bottom Line Beats, Disappointing Guidance, and Revenue Declines
BlackBerry Limited (BB) recently released its fiscal Q4 2021 report, which showed top and adjusted bottom line beats, but management’s guidance for the current year was disappointing. The company’s revenue estimates continue to drop, with Secure Communications being a significant drag.
Top and Adjusted Bottom Line Beats
BlackBerry reported fiscal Q4 revenue of $149 million, which was lower than the consensus estimate of $152.7 million. However, the company managed to beat expectations on the bottom line. Adjusted earnings per share came in at $0.03, surpassing the consensus estimate of $0.01.
Disappointing Guidance
Despite the better-than-expected Q4 results, management provided disappointing guidance for the current year. BlackBerry expects fiscal 2022 revenue to be between $500 million and $525 million, which is lower than the consensus estimate of $536.2 million. The company also expects adjusted earnings per share to be between $0.15 and $0.25.
Cylance Sale Brings in Cash
One positive for BlackBerry was the sale of its cybersecurity business, Cylance, to Osterman Research for $52 million in cash. This sale helped BlackBerry reduce its debt and focus on its core business.
Secure Communications Dragging Down the Company
Despite the sale of Cylance, BlackBerry’s revenue declines continue. The company’s Secure Communications business, which includes its legacy smartphone business, continues to struggle. Revenue from this segment was down 37% year over year in Q4.
Fair Valuation but Near-Term Overhang
Despite the revenue declines, BlackBerry’s valuation is considered fair compared to its peers. According to Yahoo Finance, BB has a forward price-to-earnings ratio of 11.3, which is in line with the industry average. However, the consistent revenue declines could provide an overhang on the stock in the near term.
Impact on Individual Investors
- BlackBerry’s disappointing guidance could lead to a sell-off of the stock, causing potential losses for individual investors.
- However, the fair valuation and potential for turnaround could make BB an attractive long-term investment for those with a higher risk tolerance.
Impact on the World
- BlackBerry’s struggles could have a ripple effect on the tech industry, as other companies with similar business models may face challenges.
- The company’s focus on security and privacy could become even more important in a world where cyber threats continue to grow.
Conclusion
BlackBerry’s fiscal Q4 report showed top and adjusted bottom line beats, but disappointing guidance for the current year. The sale of Cylance brought in some cash, but revenue estimates continue to drop, with Secure Communications being a significant drag. The stock’s valuation is fair compared to peers, but consistent revenue declines could provide an overhang on shares in the near term. Individual investors may face potential losses due to the sell-off, but the fair valuation and potential for turnaround make BB an attractive long-term investment for those with a higher risk tolerance. The company’s struggles could have a ripple effect on the tech industry, but its focus on security and privacy remains important in a world where cyber threats continue to grow.
