BlackBerry Q4 Results: Analysts’ Response

By: Zain Nabi  |   March 29th, 2013   |   News, O Canada, Smartphones

BlackBerry surprised many analysts by returning to profit in its Q4 report for fiscal 2013 that was released on Thursday. There had been predictions that the Canadian-based smartphone manufacturer would not be able to do well in the market, but the results show that even though BlackBerry lost its consumer base a bit, it was able to secure better revenue.

 

The new Z10 smartphone that BlackBerry released late in January this year has also served to the company’s ambitions nicely as around one million Z10 devices were shipped during approximately the last two months. The market has now responded differently to BlackBerry’s report. Many analysts are convinced that the company has the potential to get back to its former glory, while some are still sceptical.

 

“Blackberry continues to show superb execution on almost all fronts,” Byron Capital Markets analyst Tom Astle said in a note on Thursday, via the Globe and Mail. “Today’s profitable results should significantly reduce concerns about the company’s viability.”

 

Morningstar analyst Brian Colello shares the same view. He said about the shipment of the new Z10 smartphone, via Reuters:

 

“I think the one million units is a nice start. I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability.”

 

Reuters quoted Jefferies & Co analyst Peter Misek as saying: “Those were really solid results. The gross margin blew everybody out of the water, that was fantastic. Overall, this is step one on the recovery ladder and a very, very, very good result.”

 

It should be noted that the Z10 smartphone was not launched in the U.S., the biggest market for the phone, soon after the launch. It took some time for the smartphone to reach the U.S. market and the results shown in the report does not include sales figures from the country. Moreover, the company is expected to launch its Q10 smartphone, which will have a physical keyboard, next month. Keeping these developments in view, Ovum analyst Jan Dawson said, via Guardian: “Given the supply constraints, late launch in the US and the decision to launch the Q10 later, this is a good start for the platform.”

 

That said, Dawson maintained that the investors should wait for the next quarter results to determine the actual success of the company. Forbes quoted him as saying:

 

“We’ll also have to watch for overall sales, which may have been depressed by would-be buyers waiting out the launch in their market. Most of the devices sold in the quarter will actually have been BlackBerry 7 devices, and most of those will have been sold in emerging markets such as Latin America, Indonesia and other markets where BlackBerry remains a popular brand in smartphones.”

 

We at TQ believe that the company has done relatively well and seems to be on the course of further increasing the revenue. However, the trick to sustain in the market remains the same: BlackBerry will have to attract more customers and reach new markets, and for that it might have to offer some subsidy on its products.