BlackBerry Ltd Earnings: Is a Rebound Coming?

On Thursday, BlackBerry (NASDAQ: BBRY  ) will release its quarterly report, and investors are preparing themselves for what could look like another ugly report from the smartphone pioneer. Even as CEO John Chen aims to turn BlackBerry around, the big question facing the company is whether it can bounce back from its defeat at the hands of Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOG  ) , and come up with a real money-making strategy that can lift it from the ashes of its original mobile-device business.

BlackBerry once dominated the smartphone space, but, over time, Apple's iPhone, and devices running Google's Android have overtaken BlackBerry's offerings. Recognizing that fact, BlackBerry has moved aggressively to try to find other ways to make the most of its intellectual property. Still, it's uncertain whether BlackBerry's efforts will bear fruit in the long run, or whether shareholders will be left high and dry without outside interest in the company. Let's take an early look at what's been happening with BlackBerry during the past quarter, and what we're likely to see in its report.

Stats on BlackBerry

Analyst EPS Estimate

($0.25)

Year-Ago EPS

($0.13)

Revenue Estimate

$971.8 million

Change From Year-Ago Revenue

(68%)

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will BlackBerry earnings ever go positive again?
Investors have gotten somewhat more optimistic about BlackBerry earnings in recent months, trimming loss estimates for the May quarter and for the current fiscal year by about a third. The stock, though, has performed poorly, falling 14% since mid-March.

BlackBerry's most recent quarterly results showed just how far the company has fallen from its past heights. Revenue plunged 64%, falling below the $1 billion mark for the first time in six years. But BlackBerry's losses were much less severe than investors had expected, with CEO John Chen pointing to early success in its expense-reduction efforts. BlackBerry said it would look to get to neutral cash flow by the end of the current fiscal year, lessening concerns about a potential cash crunch at some point in the future.

BlackBerry hasn't given up on coming up with a viable handset. Last month, the company released a version of its Z3 for the Indonesian market, taking full advantage of BlackBerry's popularity in various parts of the emerging-market world. Yet, even there, Google has taken the top spot away from BlackBerry in terms of smartphone operating system penetration, with Samsung having immense popularity as the top seller of handsets in the nation. The Z3 could help change that, with a lower price tag than its higher-end Z10 model, but BlackBerry is still having to react to Samsung's more aggressive moves in Indonesia.

Still, the bigger area where BlackBerry could find success is with its Internet of Things initiative. With what it calls Project Ion, BlackBerry hopes to build up an ecosystem of its own to collect data and provide cloud-based services to customers. Of course, Apple and Google are also working hard at retaining loyal customers and building user-friendly systems of their own to invite customers to rely increasingly on their own proprietary offerings, so BlackBerry faces plenty of competition on this front, as well. In addition, though, BlackBerry is working on getting into the mobile-payments realm, which would be a necessary component of any broad-based ecosystem.

In the BlackBerry earnings report, watch to see how the company sees itself moving forward. With so much uncertainty remaining for the company, BlackBerry needs to define its strategy more clearly in order to give shareholders a better sense of what's ahead -- and what prospects BlackBerry has left.

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