BlackBerry's Revenue Decline: Here's Why Investors Shouldn't Worry

BlackBerry Ltd's BBRY revenue fell 34 percent during the fiscal third quarter, suggesting that it could be a while before the company's turnaround provides meaningful results.

This news scared off some investors initially. The stock fell more than 6 percent Friday morning before rebounding. Shares of BlackBerry were recently down less than 1 percent.

Patience May Be The Key

Analysts have a message for those who are eager to bail: be patient.

"Sybase was not turned around in a quarter or a year," Global Equities Research analyst Trip Chowdhry told Benzinga. "There are only two companies that have successfully turned around. One is Apple and the other is Sybase. Remember: it took almost seven years for Apple to turn around and turn skeptics into believers."

Related Link: Why 1 Analyst Thinks BlackBerry Is In 'Reinvention Mode'

Sybase was struggling until BlackBerry CEO John Chen joined the company and turned things around. Chowdhry believes that he will do the same for BlackBerry, but warned that it is going to take time.

"If somebody has invested in BlackBerry, they should not be looking at the earnings statements or the revenues or the earnings calls for the next seven years," said Chowdhry. "It is not a quarterly story. It is a huge undertaking -- an undertaking that is far bigger in scope than, say, Apple was. At least with Apple they had multiple products. With BlackBerry, you don't have multiple products, you have multiple services."

Results Are Coming

Rob Enderle, principal analyst at Enderle Group, echoed Chowdhry's comments. He said that when a company is going through a turnaround, it is "transitioning revenue from the existing sources to new sources, and so there are going to be quarters that are down."

Regardless, Enderle believes that BlackBerry is already showing signs of a successful turnaround. He pointed to the newly confirmed deal with Ford Motor Company to assist in developing SYNC 3.

"We're seeing results, it's just that the new revenue sources will have to eclipse the old, and then you reach a steady state," Enderle told Benzinga. "The steady state may be lower than what you had expected for the company. But then the company is back in growth mode and will grow from there."

BlackBerry hasn't completed its transition yet, so Enderle doesn't expect revenue to stabilize for a while.

"They still have an awful lot of revenue coming from the old BlackBerry, and that's the stuff that's declining," he said.

If You're A Short-Term Investor, Get Out

Chowdhry does not recommend that short-term investors hold onto their shares of BlackBerry.

"If you are a short-term investor, you should be very worried," Chowdhry warned. "If you don't have the stamina or appetite, you should not be owning BlackBerry."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.