Will BlackBerry (BBRY) Surpass Earnings Estimates? - Analyst Blog

We expect Canadian smartphone manufacturer, BlackBerry Limited (BBRY), to beat expectations when it reports third-quarter 2015 results before the market opens on Dec 19.  

 

In the last quarter, the company delivered an 88.24% earnings surprise. Let's see how things are shaping up for this announcement.

 

Why a Likely Positive Surprise? 

 

Our proven model shows that BlackBerry is likely to beat earnings because it has the right combination of two key ingredients.

 

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +33.33%. This is because the Most Accurate estimate stands at a loss of 4 cents, whereas the Zacks Consensus Estimate is pegged at a loss of 6 cents. This serves as a meaningful and leading indicator of a likely positive earnings surprise.  

 

Zacks Rank: BlackBerry currently has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1, #2 or #3 have a significantly higher chance of beating earnings. Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.

 

The combination of BlackBerry's Zacks Rank #3 and +33.33% ESP makes us reasonably confident of a positive earnings beat.

 

What's Driving the Better-Than-Expected Earnings?

 

Lately, BlackBerry has been exploring several business options which will likely help the company offset escalating losses in its smartphone business. Recently, BlackBerry together with healthcare data supplier NantHealth unveiled the world's first secure cancer genome browser on BlackBerry's Passport smartphones for doctors and clinicians.

 

The growing popularity of healthcare data analytics has encouraged BlackBerry to foray into the business. Recently, BlackBerry entered into an agreement to buy Secusmart, a leader in high-security voice and text encryption.

 

Further, BlackBerry announced plans to introduce its BBM Money service in Indonesia. Hence, we believe that such value-added services will not only add new revenue streams but also minimize losses for the company, going forward.

 

Other Stocks to Consider

 

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

 

Aruba Networks, Inc. (ARUN) has an Earnings ESP of +9.09% and a Zacks Rank #1 (Strong Buy).

 

ViaSat Inc. (VSAT) has an Earnings ESP of +31.82% and a Zacks Rank #1.

 

Nokia Corp. (NOK) has an Earnings ESP of +8.33% and a Zacks Rank #3.