Market Overview

Accounting Rules Could Drive Gross Margins for BlackBerry

Related BBRY
Morgan Stanley Comments On BlackBerry Ltd Prior To Q2 Earnings
RigNet (RNET) Falls: Stock Goes Down 5.4%
Sprint Faces Many Hurdles in Mobile Provider Race (Fox Business)

On Tuesday, Wells Fargo released some neutral comments on BlackBerry (NASDAQ: BBRY).

Analyst Maynard Um believes accounting methods will “drive gross margins up (combined with lower hardware mix).” Accounting rules “will allow recognition of the perpetual license upfront (vs amortized over a year),” Maynard said.

“Combined with our expectation for a lower opex announcement and cash flow tailwinds, this could drive FY2015 EPS,” the Wells Fargo analyst said.

Maynard remains cautious because of:

  • Pace of subscriber churn.
  • Risk of regulated industries adopting alternative solutions to BlackBerry (White House for example).
  • Potential pause ahead of BES 12 and Q20 releases.

The analyst has a Market Weight rating on the stock.

Shares of BlackBerry 0.27 percent to $9.40 in pre-market trading. Shares are up 26 percent year to date.

Latest Ratings for BBRY

DateFirmActionFromTo
Jun 2014MacquarieMaintainsUnderperform
Jun 2014Evercore PartnersUpgradesUnderweightEqualweight
Jun 2014CIBCMaintainsSector Underperformer

View More Analyst Ratings for BBRY
View the Latest Analyst Ratings

Posted-In: Maynard Um Wells FargoAnalyst Color Analyst Ratings Tech

 

Related Articles (BBRY)

Around the Web, We're Loving...

Partner Network

Get Benzinga's Newsletters