About 41% of BlackBerry’s Q2 revenue came from hardware sales (800,000 smartphones), implying enterprise stickiness to a secure phone network is still important to the business. The company also repurchased six million shares during the quarter for a total of $47 million, signaling to the markets that it thinks its stock is inexpensive.
Alex Cutulenco | September 28, 2015:
Article Highlights:
- BlackBerry Limited (NASDAQ: BBRY) reported Q2/2015 financials on Friday, September 25, 2015
- Revenue declined 46.5% from Q2/214, to $491 million
- 41% of revenues was coming from hardware sales (800,000 smartphones), implying enterprise stickiness to a secure phone network is still important to the business
- Company confirms plan to launch Priv, a device using the Android operating platform with their application ecosystem
- Company repurchased 6 million shares during the quarter for a total of $47 million, implying that the Company believes the stock is cheap with a good current opportunity to buy
Regardless of the drop in its stock price over the past several years, one fact remains: BlackBerry is still the leader in mobile security. The Company is looking undervalued, trading at US$3.7 billion, with its management choosing to buy back some of its own stock, potentially in an effort to later use these shares for acquisition purposes. About 18.4% of the Company’s stock is sold short, which is extremely large in any case. Apple Inc.’s stock, in comparison, only has a 1.6% short interest. A short-covering rally, also called a ‘short squeeze’, could cause the BlackBerry’s stock to get back to more reasonable prices.
In terms of strategy moving forward, the quarter highlighted the fourth consecutive quarter of year-over-year double digit growth in software licensing revenue and the sixth consecutive quarter of positive free cash flow. CEO John Chen said, “In order to expand our leadership in cross platform software and services, we are investing strategically – organically through new products and services based on the BES platform, and through acquisitions like AtHoc and Good.”
