BlackBerry Shares Dip as Company Fails to Meet Q4 Revenue Estimates

Canadian security software provider BlackBerry saw its shares trailing on Wednesday after Wall Street learned that the company’s fourth quarter revenue has lagged behind estimates.

For the quarter the company registered $210 million, which was down from $282 million a year ago and below the FactSet analyst consensus of $245 million.

Excluding items, the company reported a profit of 3 cents per share, in line with analysts’ estimates.

Net loss widened to $315 million, or 56 cents per share, in the fourth quarter from $130 million, or 23 cents per share, a year earlier.

BlackBerry had reported that sales of its QNX car software showed improvement, an encouraging sign as the automobile industry had been suffering amid Covid-19. The QNX car software is used by automakers such as Volkswagen and Ford Motor.

“This has been an exceptional year to navigate, however we are pleased with QNX’s continued recovery, despite new challenges from the global chip shortage,” remarked Chief Executive Officer John Chen.

Shares were falling over 8% on the financial report but Canaccord Genuity’s T. Michael Walkley still felt prompted to lift his rating to hold from sell. He did however lower his price target to $9 from $10 to reflect recent market activity.

[“The] software and services fundamentals should improve throughout fiscal 2022,” Walkley wrote in a commentary.

“Should management reach a deal to sell the licensing business, … this could help unlock value and provide a capital infusion to drive accelerated software and services growth.”

To be sure, “while we believe management has created a cogent long-term strategy and the business is turning the corner towards stronger trends, we await more proof … before becoming more constructive on the shares,” Walkley also wrote.

Raymond James analyst Steven Li who has a market-perform rating on the stock has lifted his price target to $9.50 from $8 while RBC analyst Paul Treiber assigned BlackBerry an underperform rating with a $7.50 price target.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.