Shares of BlackBerry (BB 12.93%) went sour on Friday, following a solid earnings report with a side of constructive but unexciting guidance. The stock closed 13.7% lower, revisiting price levels not seen since mid-September.
NYSE: BB
Key Data Points
When "solid" isn't good enough
The communications security and embedded systems specialist posted robust results in the third quarter of fiscal year 2026. Revenue fell 1.8% year-over-year to $141.8 million while adjusted earnings landed at $0.05 per diluted share, up from a breakeven result in the year-ago period. The analyst consensus had pointed to earnings near $0.04 per share on sales in the neighborhood of $135.6 million.
BlackBerry's management also updated their full-year guidance, tightening their target ranges around the upper half of last quarter's guidance report. In other words, BlackBerry raised the lower end of its full-year target ranges while leaving most of the top-end levels untouched.
That's a mildly bullish review of the ongoing fourth quarter, but not exactly a home run. Shares were trading at a lofty 48 times trailing earnings on Thursday evening. Barely edging out Wall Street's expectations while top-line sales are down just wasn't enough, and the modest guidance boost didn't help.
Image source: Getty Images.
Guidance, momentum, and expectations
It's not always easy to keep investors happy, despite above-guidance Q3 results and boosted targets across the lower end of most full-year guidance ranges.
Today's sell-off looks like a classic case of investors "selling the news" after a recent mini run-up, especially with BlackBerry still posting year-over-year revenue declines and bullish long-term expectations already baked in. The market is fixating on signs of slower momentum (particularly in key operating metrics like recurring revenues) rather than last quarter's backward-looking beat.
