Here's What You Missed in BlackBerry's Earnings Report
The market welcomed BlackBerry's (NYSE: BB) better-than-expected fiscal second-quarter results, as evidenced by the 10.88% surge in the stock price following the news. Yet, investing in the stock remains a bet on management's ability to transform the cybersecurity specialist over the long term. And that bet has become riskier, as the company is likely to be accumulating significant losses over the next several years before potentially succeeding in its initiatives. Let's dig in.
At first sight, the company's second-quarter results looked disastrous. Revenue decreased 32% year over year to $175 million, and net loss reached $142 million, compared to a net loss of $23 million in the year-ago quarter.
However, analysts expected a sharp year-over-year drop in revenue. Indeed, BlackBerry is holding back the monetization of a significant part of its patent portfolio while seeking a buyer for this asset. Consequently, revenue from BlackBerry's "licensing and other" segment, which includes patent monetization, shrunk to $15 million, compared to $108 million the year before. And in addition to one-time items, the lack of revenue from that high-margin business (gross margin of 94% last year) contributed to BlackBerry's increasing net loss.
Source Fool.com
