News Summary
Shares of BlackBerry Limited (BB) declined after the company’s current quarter forecast fell short of expectations due to strikes by workers at the big three automakers earlier this year.
Impact of Auto Strikes on BlackBerry’s Forecast
The company reported that the strikes have harmed some of its largest customers, and the effects are expected to continue impacting the company in the upcoming period. In the third fiscal quarter, BlackBerry posted an unexpected profit of $0.01 per share and strong sales, driven by demand for its cybersecurity products.
Revenue Forecast for the Current Quarter
The Canada-based company expects its revenues for the current quarter, the fourth quarter of the fiscal year 2024, to range between $150 million and $159 million, which is below expectations.
Impact of Strikes on BlackBerry’s Customers
CEO John Chen explained that the strike by the United Auto Workers union affected production volumes for some of BlackBerry’s largest customers, noting that “we expect this impact to be felt in the fourth quarter of the fiscal year.” He added that while there is “no change in the strategic direction towards software-defined vehicles, some timelines have been pushed back.”
BlackBerry’s Third Fiscal Quarter Earnings
The company benefited from a significant increase in its cybersecurity business, with revenues reaching $144 million, a 44% increase from the second quarter and an 8% increase from the previous year. Chen noted that the unit secured “significant strategic deals with leading government agencies that contributed to strong sequential revenue growth and expanded margins.”
Decline in BlackBerry Shares
Thursday’s decline resulted in a nearly 13% drop in BlackBerry Limited shares.
Sources
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Article Sources
BlackBerry. “BlackBerry Reports Third Quarter Fiscal Year 2024 Results,” Page 2.
Seeking Alpha. “BlackBerry Limited (BB) Q3 2024 Earnings Call Transcript.”
Blackberry Limited. “BlackBerry Reports Third Quarter Fiscal Year 2024 Results,” Page 1.
Source: https://www.investopedia.com/blackberry-shares-tumble-as-auto-strikes-affect-outlook-8419394
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