BlackBerry Investors See No Quick Fix Under Chen

8/12/2019 BlackBerry Investors See No Quick Fix Under Chen

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lack erry investors see no quick fix underChen Compared with what his predecessors had to go through, BlackBerr

y Ltd. chief executive John Chen has so far received relatively kind tr

eatment from his companys longsuffering investors.

!his week, hell have a chance to reward their patience or see ho

w far he can stretch it.

BlackBerry is expected to report its fiscal fourthquarter earnings "efore markets open on #riday. $n average, analysts expect the compan

y to post revenue of %&.&"illion and a net loss of a"out '( cents a

share for the quarter ending )arch &, *+&.!hose num"ers would not

"e too far off BlackBerrys performance in the previous quarter, "ut

well "elow the same quarter last year, when BlackBerry posted revenu

e of %*.("illion and earnings per share of &- cents.

!heres growing evidence that investors have "een willing to cut the

company a little more slack these days, as it continues trying to pull o

ff a difficult transition from a smartphone giant to a possi"ly much s

mallersi/ed0 software and services provider.

1fter dipping to &+year lows around the %2 mark in 3ecem"er follo

wing a "otched attempt to go private0, BlackBerry shares have held s

omewhat sta"le at around the %4 mark since January.

!he lack of share price shocks is especially good news for BlackBerry,

given that one of the main 5ustifications for trying to take the compan

y private in the first place was to avoid the negative stock market re


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percussions of transitionrelated news, such as product cancellations

and 5o" cuts.

6ndeed, the 7treet might "e willing to even give the stock price a little"oost, should earnings come in around expectations and should )r. C

hen "e a"le to give some insight into how the companys costsaving

measures are working thus farsince )r. Chen took over as C8$ in 9o

vem"er, BlackBerry has continued frequent rounds of 5o"cutting, and

has also sold considera"le real estate holdings0.

6nvestors and analysts will also "e looking for more information a"out

BlackBerrys production deal with manufacturing giant #oxconn, which

recently "egan "uilding lowerend BlackBerrys targeted at overseas m

arkets such as 6ndonesia where BlackBerrys market share hasnt

plummeted in the same way it has in 9orth 1merica.

!he overarching strategy "ehind the #oxconn deal, announced in late 3

ecem"er, was to have a thirdparty manufacturer take over the "uildi

ng of cheaper commodity phones, there"y allowing BlackBerry to focusits inhouse talent on the design and manufacture of a very small num

"er of highend, highmargin devices.

But for that strategy to work, not only must overseas consumers in

markets such as 6ndia and :ene/uela continue their love affair with Bla

ckBerry, "ut the company must also find a way to regain the interest

of its highend customers.

)any of those consumers and some enterprise customers0 left the Bla

ckBerry platform "ehind late last year, when news of the companys

impending "ut ultimately unsuccessful0 privati/ation shook their faith in

the prospects for the smartphones.


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)r. Chen will also face pressure to ela"orate on the wider shift from

hardware to software. 6n recent months, much of the

companys news has related to new devices, "ut many research firms

now estimate that BlackBerry devices make up a minuscule portion of

the overall market share.

1ccording to 6nternational 3ata Corp., BlackBerrys share of the glo"

al smartphone market at the end of last year was 5ust +.2 per cent, d

own from ;.* per cent last year and now lagging well "ehind even the??www.plurk.com?

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BlackBerry Investors See No Quick Fix Under Chen