NEW YORK (TheStreet) -- BlackBerry (BBRY) shares are up 2.64% to $9.15 in afternoon trading on Monday ahead of the release of the telecommunication company's first quarter earnings results before the opening bell tomorrow.
Analysts on average are expecting the company to report a net loss of 4 cents per share on revenue of $683.65 million.
During the same period last year the company reported a net loss of 11 cents per share on revenue of $966 million. The company matched both estimates during the period.
BlackBerry is in the middle of an attempted turnaround as it looks to gain back market share for its once ubiquitous mobile handsets.
However, the company reported a quarter to quarter 24% drop in hardware revenue when it last reported its financial results.
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 several 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 area that we feel has been the company's primary weakness has been its declining revenues."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
- The gross profit margin for BLACKBERRY LTD is rather high; currently it is at 62.58%. Regardless of BBRY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BBRY's net profit margin of 4.24% is significantly lower than the industry average.
- The revenue fell significantly faster than the industry average of 33.3%. Since the same quarter one year prior, revenues fell by 32.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.69 is very high and demonstrates very strong liquidity.
- Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full analysis from the report here: BBRY Ratings Report