BlackBerry Will Likely Look At Strategic Alternatives Beyond A Sale, Says Wells Fargo

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In a report published Friday, Wells Fargo analyst Maynard Um commented briefly following BlackBerry Ltd BBRY's fourth quarter results.

According to Um, BlackBerry's revenue of $660 million was below his expectations of $721 million and "well below" the Street's estimate of $792 million. Non-GAAP earnings per share of $0.04 was higher than the his expectations of a $0.05 loss while free cash flow (excluding the impact of foreign exchange) was $180 million – higher than the $54.6 million expected.

A full recap of BlackBerry's earnings can be seen here while a recap of the post-earnings conference call can be seen here.

Um noted that despite a better than expected free cash flow (which was aided by lower operating expenditure and the sale of Rockstar for $115 million), BES12 does not appear to be showing signs of a "clear ramp," which is likely to be viewed as "disappointing."

The analyst continued that a potential sale of the company is less likely in the near-term and BlackBerry will look at other strategic alternatives including further restructuring, potential divestitures and aggressively target multi-platform strategies. However, upside risk could come from a potential strategic action.

Shares remain Market Weight rated with a valuation range of $9.50 to $10.50.

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Posted In: Analyst ColorAnalyst RatingsBES12BlackberryMaynard UmWells Fargo
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