BlackBerry Q2 Revenue Falls 32%; Shares Gain 10%

Shares of BlackBerry (BB) gained 10% in early trading Thursday after the company posted lower revenue in the second quarter of 2022 as compared to a year ago, but not Read More... The post BlackBerry Q2 Revenue Falls 32%; Shares Gain 10% appeared first on TipRanks Financial Blog.

BlackBerry Q2 Revenue Falls 32%; Shares Gain 10%

Shares of BlackBerry (BB) gained 10% in early trading Thursday after the company posted lower revenue in the second quarter of 2022 as compared to a year ago, but not by as much as analysts anticipated. BlackBerry provides intelligent security software and services to businesses and governments.

Revenue came in at $175 million in Q2 2022, down 32% from $259 million in Q1 2021. Analysts expected revenue of $163.5 million. Demand for cybersecurity and IoT products has increased as more businesses and government organizations move operations to the cloud to support hybrid work.

Meanwhile, net loss widened to $144 million ($0.25 per share), from $23 million ($0.04 per share), a year earlier. (See BlackBerry stock charts on TipRanks)

Excluding one-time items, the company posted an adjusted loss of $33 million ($0.06 per share) in the quarter ended August 31, compared to an adjusted profit of $58 million ($0.10 per share) in the prior-year quarter. Analysts expected an adjusted loss of $0.07.

BlackBerry executive chairman and CEO John Chen said, "Revenue for all businesses beat expectations this quarter. The Cyber Security business unit delivered robust sequential billings and revenue growth and the IoT business unit performed well in the face of global chip shortage pressures."

Following the results, RBC Capital analyst Paul Treiber kept a Sell rating on BB with a C$9.59 price target. This implies 28.4% downside potential.

Treiber stated that while BlackBerry’s main revenue was slightly above expectations on non-recurring components, recurring revenue was below expectations.

The analyst added that the price of Blackberry's soon-to-be-sold patents (expected to be worth $1 billion) should have a big impact on the stock. He further noted that Blackberry management sees an 80% chance of closing the deal within a quarter.

Overall, BB scores a Moderate Sell rating among Wall Street analysts, based on one Hold and three Sells. The average BlackBerry price target of C$12 implies 9.9% downside potential to current levels.

TipRanks’ Smart Score

BB scores a 4 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns are likely to be in line with the overall market.

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The post BlackBerry Q2 Revenue Falls 32%; Shares Gain 10% appeared first on TipRanks Financial Blog.

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Gauging Luckin Coffee’s Risk Factors

Luckin Coffee (LKNCY) provides a technology-driven retail network to serve coffee and other products to consumers. The company reported 33.3% top-line growth for Fiscal Year 2020. Let's have a look Read More... The post Gauging Luckin Coffee’s Risk Factors appeared first on TipRanks Financial Blog.

Gauging Luckin Coffee’s Risk Factors

Luckin Coffee () provides a technology-driven retail network to serve coffee and other products to consumers. The company reported 33.3% top-line growth for Fiscal Year 2020.

Let's have a look at Luckin’s recent fiscal 2020 financials as well as what has changed in its key risk factors that investors should know.

In fiscal 2020, driven chiefly by higher average product selling prices, Luckin’s net revenue jumped 33.3% year-over-year to $618.1 million. The cumulative number of transacting customers of the company stood at 64.9 million as of December 31, 2020, as compared to 40.6 million as of December 31, 2019.

Operating expenses of the company were $1 billion, declining as a percentage of net revenue to 164.1%, versus 206.2% a year ago. (See Luckin Coffee stock charts on TipRanks)

Shares are up 458.8% over the past 12 months.

Risk Factors

According to the new Tipranks Risk Factors tool, Luckin’s main risk category is Finance & Corporate, accounting for 33% of the total 101 risks identified. Since December, the company has added three key risk factors.

Under the Finance & Corporate risk category, Luckin noted that trading in its ADRs may be prohibited under the Holding Foreign Companies Accountable Act, if the Public Company Accounting Oversight Board (PCAOB) is unable to inspect Luckin’s auditor.

The next two risk factors are under the Legal & Regulatory risk category. The company noted that approval from the CSRC or other PRC government authorities may be needed under PRC law, in connection with Luckin’s offshore securities offering. If such approval is required, then Luckin cannot predict if or for how long it will be able to obtain such approval.

Third, Luckin highlighted that its current corporate structure, business, and financial condition may suffer if its VIE structure gets deemed as a method of foreign investment under any present or future PRC laws and regulations, and if any operations of any of its subsidiaries will get restricted or prohibited from foreign investment.

Compared to a sector average Legal & Regulatory risk factor of 17%, Luckin Coffee’s is at 29%.

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The post Gauging Luckin Coffee’s Risk Factors appeared first on TipRanks Financial Blog.

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