BlackBerry Limited (BBRY, Financial) is among the technology companies that have been struggling in the market due to fierce competition. With the advent of giants like Apple (AAPL, Financial) and Google (GOOGL, Financial), the company that was once the leader in the smartphone market was pushed down and away from the top spot. In the recent past, BlackBerry has exhibited some improvement in its stock market performance, and this enhancement may be linked to the upcoming announcements to be made by the company on September 24.
It is expected that BlackBerry will launch on September 24 its Passport device which sports features that make this device one of a kind. BlackBerry Passport will feature a 4.5-inch display with 1440x1440 pixel density, an innovative keyboard with touch functionality and Qualcomm’s Snapdragon 800 chipset with 2.2 GHz quad-core CPU along with 3GB RAM. The device will also have stereo speakers and four microphones. In addition to that, the device will have battery power of 3450mAh which should be sufficient to make the device run for a whole day. This aspect is considered to be important as most of the smartphone users complain about the lack of battery power in these devices.
With regard to stock market performance of BlackBerry, the stock price has gone through some steep declines and inclines over the past one year. The 52-week range of the stock price was $5.44–$11.65 which suggests that the stock price has gone through significant inclines and declines over the past one year. At the time of this edition, the company’s stock was being traded within the range of $10.35–$10.81. Thus, it can be said that the current price range of the stock is closer to the 52-week high and if the price continues to rise, the stock may soon hit its 52-week high.The anticipation for the upcoming device is high, and this anticipation is being reflected in the market performance of the stock. Therefore, it can be said that the upward trend will dominate the market performance of BlackBerry until the announcement of the new device. Figure 1 shows the trend of BlackBerry’s market performance over the past one year.
Figure 1: Market Performance of BlackBerry
(Source: Google Finance)
BlackBerry announced financial information for its first quarter fiscal 2015 on 19 June. The revenue of the company for the quarter was $977 million which was slightly higher than the previous quarter’s revenue of $976 million; however it was significantly lower than the revenue for the same quarter in the previous year which was $3,071 million. Although the revenue for Q1 2015 is lower when compared to the revenue in Q1 2014, the net income for the quarter is higher. For Q1 2015, the net profit is $23 million while, for Q1 2014, the company suffered a net loss of $84 million. In the immediately preceding quarter ended 1 March 2014, the company also suffered a net loss of $423 million. Therefore, it can be said that the company has started to regain its profitability after a long period of announcing losses. The financial information for the second quarter of fiscal 2015 will be announced on September 26, two days after the expected announcement of the new device. It is yet to be seen if the company continues its profitability in the upcoming quarters. The direct competitors of the company, Apple and Google, are performing very strongly in the stock market and financially. Apple announced a net profit margin of 20.70% for its second quarter of fiscal 2014, while Google announced a net profit margin of 21.87%. In comparison, BlackBerry’s net profit margin for the quarter is 2.38%. Figure 2 represents the financial performance of BlackBerry over the past five quarters.
Figure 2: Financial Performance of BlackBerry
Considering the return of BlackBerry to profitability and the anticipation for the new device, it can be said that the market performance of BlackBerry will continue to follow the upward trend in the short. The future of the market will be determined by the disclosure of earnings report for Q2 due on September 26. Until then, positive trend seems to be imminent. Therefore, BlackBerry can be awarded a "buy" status in the short term and a "hold" status in the long term.
