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When Is BlackBerry Expected to Return to Revenue Growth?

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Mar. 13 2018, Published 11:33 a.m. ET

Revenue expected to decline 31.7% YoY in fiscal 2018

As we observed in the previous part of this series, Wall Street analysts expect a revenue decline of 27% YoY (year-over-year) for BlackBerry (BB) in fiscal 4Q18 with revenue of $216.8 million. They expect its revenue to fall almost 32% YoY to $938.4 million in fiscal 2018, compared to its revenue of $1.37 billion in fiscal 2017.

BlackBerry’s revenue is expected to fall 14.5% YoY to $208.5 million in 1Q19, the quarter that ends in May 2018, and 5.8% YoY in fiscal 2019 to $883.84 million. Analysts expect the company’s revenue to rise over 14% YoY to $1.02 billion in fiscal 2020.

BlackBerry’s non-GAAP (generally accepted accounting principles) EPS (earnings per share) could fall from $0.04 in 4Q17 to $0.01 in 4Q18. However, its EPS might rise 67% YoY from $0.06 in fiscal 2017 to $0.1 in fiscal 2018.

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Profit margins might improve with revenue growth

BlackBerry is expected to post an operating margin of 1% in fiscal 2018 with a net margin of 38.2%. The company’s operating margin might improve to 5.2% with an operating margin of -7.4%, while the operating margin and net margin are expected at 14.5% and -3.4%, respectively, in fiscal 2020.

BlackBerry has seen a significant fall in revenue over the last few years. It initially struggled to compete with tech giants such as Apple, Korea’s (EWY) Samsung (SSNLF), and China’s (FXI) Huawei in the smartphone market and then exited this market in late 2016. This decline also negatively impacted profit margins for the company. BlackBerry reported an operating margin of 15% with a net margin of 6.3% on revenue of $18.5 billion in fiscal 2012.

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