Blackberry losses expected to shrink

Could a return to the classic look see Blackberry return to favour?

Blackberry logo
Source: Bloomberg

On Friday 19 December Blackberry is due to post its third-quarter figures. The company’s adjusted earnings per share are expected to deteriorate from $-0.02 down to $-0.052. Sales are expected to improve from $916 million up to $931.67 million, and this should contribute to the expected pre-tax loss for the company to reduce from $218 million down to $41.19 million.

The smartphone technology sector has a reputation for aggressive growth foresight and development, so today’s launch of the ‘new’ Blackberry Classic is a step away from what consumers and the markets have been used to. Launching initially in North America and retailing at $499, it is not aiming at the cheap end of the market. The aesthetics fit snuggly into the classic style that Blackberry was originally renowned for, but the technology inside the unit is anything but. At the moment Blackberry accounts for only 0.7% of the global smartphone market and arguably has nothing to lose in trying to distinguish itself from the very similar options available from Samsung, Apple and HTC.

Institutional analysts are as yet unconvinced: only two have a buy rating, with 22 holds and 12 sells. BGC are the latest to voice an opinion and today have raised the company to a buy with a $12.50 target. It is worth noting that the average target from all the analysts is $9.76.

The last couple of trading days have seen the company bounce off the 200-day moving average and just move out of oversold territory. If the look can strike a chord with the fickle consumers, this may offer a turning point for the company.

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