NEW YORK (TheStreet) -- BlackBerry (BBRY - Get Report) is due to report its year-ending quarter before the bell Friday. The smartphone maker has suffered a turbulent year in the face of declining hardware sales and increasingly fierce competition from Samsung, Microsoft (MSFT) and Apple (AAPL). The fourth quarter will mark CEO John Chen's first complete three-month period at the company since he replaced Thorsten Heins in November last year.
Analysts surveyed by Thomson Reuters expect an average net loss of 55 cents a share in the three months to February, narrower than a loss of 67 cents a share in the third quarter ending November. However, this is still a far cry from profits of 22 cents a share in the year-ago quarter.
Analysts anticipate quarterly revenue of $1.1 billion, a 58.7% year-over-year drop from $2.68 billion in the year-ago fourth quarter.
By market close Thursday, shares had slipped 1.2% to $9.05. Trading volume of 32.6 million had exceeded its three-month daily average of 21.2 million.
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TheStreet Ratings team rates BLACKBERRY LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLACKBERRY LTD (BBRY) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BLACKBERRY LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BLACKBERRY LTD swung to a loss, reporting -$1.20 versus $2.24 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 49000.0% when compared to the same quarter one year ago, falling from $9.00 million to -$4,401.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, BLACKBERRY LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$81.00 million or 108.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 28000.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: BBRY Ratings Report