BlackBerry Ltd (NYSE:BB) has released a trailer giving a glimpse of what to expect from the tech company during the CES 2019 slated for January o8 to 11. This comes a few weeks after the company announced better-than-expected third quarter revenue. Nonetheless, the company’s stock declined after the announcement with the CEO John Chen promising a brighter future and minimal effects from the paused US-China trade wars.
CES 2019
BlackBerry has confirmed the presence in the tech event, and no, the company won’t be showcasing mobile phones. Chen has been steering the company towards mobile and security software, apps and the internet of things since taking over the company as the Chief Executive Office in 2013. BlackBerry has since gone slow on mobile phones production since then and has recently announced the decision to stop manufacturing its phones.
At the center of BlackBerry’s attention will be the company’s proprietary QNX software. BlackBerry believes that the software running it and QNX will significantly shape cars of the future will be the embodiment of it.
BlackBerry will be showcasing how the QNX solution enhances automobile driving providing intriguing user experience while observing safety measures. BlackBerry looks forward to pushing QNX utility to as many applicable sectors as possible.
BB Financials
BlackBerry recently released its much anticipated third quarter results. The company raked in revenue of $228 million, surpassing analysts’ consensus estimate of $215 million. Revenue for BTS the operator of Radar and QNX grew 23% to an impressive $53 million.
The company’s proceeds from Intellectual Property (IP) and Licensing surged 36%. The surge is attributed to a one-time deal and the growing demand for the company’s proprietary technologies. However, revenue from Enterprise software sagged by 1% as a result of foreseen temporary challenges. In general revenue from software and services grew 14% while hardware revenue declined to $9 million.
In light of the Q3 earnings, the company did not revise its annual revenue guidance. Nonetheless, analysts covering the company’s stock expect the Q4 guidance to be increased once the Cylance deal is finalized.
BB Stock
Even after posting the relatively good results, the company’s stock dropped afterward. Probably investors are not sold to how Cylance that was acquired for over a billion will contribute to the company’s revenue growth.
BlackBerry’s stock has dropped about 53% of its 52-week high value. As of Friday, December 28 the stock closed at $7.16 from an opening price of $7.06 giving the company a valuation of $3.92 billion. Considering the company’s high of $147.55 in 2008, it is clear that BlackBerry’s shares have stooped too low for anyone considering investing in.
Source: Stockcharts.com
US-China Tariff war
Well, one person that is optimistic about the company’s shares is its CEO, Chen. Mr. Chen believes that once the shareholders are updated on the commercial value of Cylance, they will be back on board and the stock will grow.
Chen says that the general market decline is also to be blamed for his company’s plunging stock. He further states that Blackberry will not be affected adversely by the US-China Tariff rows because of the nature of its clients.
Chen explains that “I have three major sectors of clients: the governments, they’re not affected as much, unless the tax base goes down; the financial, they’re usually global, so they will be affected in some ways if the trading slows down. And then there’s transportation and IoT, which are areas that a lot of people are investing in, and I don’t see that slowing down.”