Why BlackBerry (BBRY) Stock Is Climbing Today

NEW YORK (TheStreet) -- Shares of BlackBerry Ltd. (BBRY) are higher by 4.15% to $9.53 in mid-morning trading on Tuesday, after the company completed its restructuring process, according to an internal memo viewed by Reuters.

The wireless solutions and communications company issued the memo on Friday, notifying employees that the restructuring process is "now behind us."

Blackberry's restructuring process took three years and over that time its workforce declined by 60%.

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Blackberry CEO John Chen has been at the head of the company for almost eight months and worked quickly to regain Blackberry's stability by selling non-core assets, selling the company's real estate holdings in Waterloo, Ontario, and making Blackberry's manufacturing and supply chain more efficient, Reuters reports.

The memo also said Blackberry is in a position to make acquisitions in order to reinforce specific areas and accelerate revenue growth.

Separately, 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 few notable weaknesses, 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, disappointing return on equity and weak operating cash flow."

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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, BLACKBERRY LTD reported poor results of -$11.17 versus -$1.20 in the prior year.
  • 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 $302.00 million or 52.06% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • BBRY, with its very weak revenue results, has greatly underperformed against the industry average of 8.9%. Since the same quarter one year prior, revenues plummeted by 68.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that BBRY's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.11 is high and demonstrates strong liquidity.
  • You can view the full analysis from the report here: BBRY Ratings Report
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