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BlackBerry (BB, Financials) shares declined by 21.7% in premarket trading Wednesday after the Waterloo, Ontario-based company forecast revenue and earnings for fiscal 2026 that missed analyst estimates.
The company projected fiscal 2026 revenue between $504 million and $534 million, with a midpoint of $519 million. That is well below the $550.6 million average estimate from analysts, according to data compiled by Bloomberg. Adjusted earnings per share are expected to range from $0.08 to $0.10, with the high end of that range still underperforming the consensus estimate of $0.10 per share.
Guidance for the current quarter also fell short of expectations. BlackBerry expects first-quarter revenue between $107 million and $115 million, below the $128.4 million analysts projected. Secure Communications revenue, a key segment for the company, is expected to come in between $50 million and $54 million.
The outlook came on the heels of a stronger-than-expected fourth-quarter performance. Revenue for the quarter reached $141.7 million, a decrease of 18.1% from a year earlier, but ahead of the $132.8 million estimate from analysts. Adjusted earnings per share were $0.03, beating expectations by three cents. The company reported $42 million in operating cash flow for the period.
Chief Executive Officer John Giamatteo said in a statement the company's three divisions QNX, Secure Communications, and Licensing delivered solid financial results in the fourth quarter. He also said the company completed the sale of its Cylance cybersecurity business to Arctic Wolf, a transaction aimed at strengthening the balance sheet.
Giamatteo said the company now has a solid financial position that gives it flexibility in creating shareholder value.
This article first appeared on GuruFocus.