BlackBerry Posts Narrower-than-Expected Loss - Analyst Blog

Canadian handset manufacturer, BlackBerry Limited BBRY, reported first quarter of fiscal 2015 financial results wherein both the top and the bottom line compared favorably with the Zacks Consensus Estimate.

First Quarter Results in Detail

GAAP loss from continuing operations in the first quarter of fiscal 2015 came in at $6 million or a loss of 37 cents per share compared with $164 million or 16 cents in the year-ago quarter. However, adjusted net loss per share of 11 cents was significantly lower than the Zacks Consensus Estimate of a loss of 28 cents per share. 

Total revenue in the reported quarter stood at $966 million against 3,071 million in the year ago quarter. However, total revenue outpaced the Zacks Consensus Estimate of $954 million. Segment wise, Hardware revenues were approximately 39%, Services revenues were 54% and the remaining 7% came from Software and other sources.

Geographically, North America contributed 28.6% of the total revenue while Europe, the Middle East and Africa accounted for 42.9% of the figure. Similarly, Latin America and Asia Pacific generated 12.9% and 15.6% of the total revenue in the reported quarter, respectively.

In the first quarter, BlackBerry sold 2.6 million smartphones. Quarterly operating income stood at $20 million compared with an operating loss of $169 million in the year-ago quarter.

At the end of the first quarter of fiscal 2015, BlackBerry generated $302 million of cash from operations against $630 million in the prior-year quarter. Free cash flow, in the reported quarter, stood at $276 million compared with $519 million in the year-ago quarter. Cash and marketable securities were $2,685 million as against $2,529 million at the end of fiscal 2013. Long-term debt during the quarter totaled $1,340 million versus $1,627 million in the prior-year quarter.

BlackBerry currently has a Zacks Rank #2 (Buy).

Outlook

BlackBerry continues to restructure its business and expects to generate break-even cash flow at the end of 2015.

Our Take

Ever since Apple Inc.'s AAPL iPhone hit the market, BlackBerry and Nokia Corp. NOK have been facing intense competitive pressure. The situation worsened once Google Inc. GOOG launched its Android software and several handset manufacturers adopted the operating system.