BlackBerry Has Become A Story Of Continued Progress And Diminishing Headwinds

BlackBerry Ltd (NASDAQ: BBRY) reported its fiscal fourth-quarter 2017 results ahead of expectations. While the company continues to make turnaround progress, it faces emerging growth opportunities due to its transition to Software and Services, as well as diminishing headwinds from its Legacy business, Imperial Capital’s Michael Kim said in a report.

Kim maintains an In-Line rating and a price target of $8.25 for the company.

Results Review

BlackBerry reported its adjusted revenue at $297 million, beating the Street estimate of $289 million. Adjusted EPS came in at $0.04, versus expectations of breakeven. Software and Services revenue was reported at $193 million, versus Imperial Capital’s estimate of $190 million.

Management indicated that software billings were among the highest ever recorded in a quarter, and expects the solid growth to continue.

Continued Progress And Diminishing Headwinds

“BBRY achieved continued progress on its turnaround strategy and pivot to software and services, with diminishing headings from Service Access Fees (SAF) and hardware sales,” Kim noted.

While maintaining the FY 2018 estimates, Kim mentioned that there was upside to the software and services expectations from emerging opportunities for asset tracking and enterprise mobility.

“We believe BBRY is also expanding its pipeline of opportunities for Communication Platform-as-a-Service (CPaaS) and could capture contract awards for its new security operations (SOC) targeting U.S. federal government customers,” the analyst added.

At last check, shares of BlackBerry were up 3.46 percent at $8.07.

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