BlackBerry Earnings: Crowd & Experts' Estimates Increasingly Divergent

Shares of BlackBerry Ltd BBRY are up on Monday, ahead of the announcement of the company’s first quarter (fiscal 2016) financial results, scheduled for Tuesday morning, before the market opens.

According to Estimize, expectations point towards a marked amelioration in earnings. The Street is modeling a 63 percent year-over-year reduction in the business’ net loss, from ($0.11) per share reported a year ago, to ($0.04) per share this quarter. However, sales are expected to fall from $966 million in the first quarter last year, to $686.75 million.

The crowd is more optimistic, and projects consensus earnings of $0.02 per share on sales of $702.37 million (consensus based on 69 estimates).

It should be noted from the chart above, however, that BlackBerry has managed to surpass both the crowd and experts’ expectations in the last five quarters. This trend suggests there is potential for a beat in the current quarter as well.

The second chart, featured above, illustrates the evolution of sentiment over time. As it can be seen, although the crowd was always more bullish than the Street, estimates started to really diverge in late-March.

Software Sales

Management expects software sales of $600 million this year. However, in a recent research report, RBC Capital analyst Mark Sue questioned the guidance, noting the outlook is outlook "back-end loaded."

Related Link: All Eyes' On BlackBerry Next Week

Moreover, the expert projects sequentially flat first-quarter software sales of roughly $70 million.

BMO's Tim Long also commented on the issue. The analyst thinks the $600 million goal is "ambitious" and believes Blackberry needs to report at least $84 million in first-quarter software revenue to show "a solid trajectory" toward the aimed-for number.

Imperial Capital analyst Michael Kim weighed in on BlackBerry ahead of the earnings call too. The analyst expects to see a net loss of ($0.05) on revenue of $780 million.