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What to Expect When BlackBerry Ltd Reports Next Week

BlackBerry Ltd  (TSX: BB)(NASDAQ: BBRY) is due up to report its quarterly earnings next week. The company, which once dominated the smartphone space, has long lost its pole position to Apple Inc.’s iPhone and Google Inc.’s Android devices. However, over the past year, Chief Executive John Chen has quarterbacked something of a turnaround.

The firm is bleeding less cash. Management is finding new business niches. For the first time in a while, investors finally have a reason to be optimistic. Let’s take an early look at what’s been happening with BlackBerry during the past quarter and what investors should expect in the upcoming report.

Stats on BlackBerry

Analyst EPS Estimate ($0.04)
Year-Ago EPS ($0.67)
Revenue Estimate $944.5 million
Change Year-Ago Revenue (21%)
EPS Beats in Past Year 3

Source: Yahoo! Finance

Can John Chen turn BlackBerry around?

Investors have become more bullish on BlackBerry earnings. Over the past couple of months, analysts have trimmed their loss estimates for the November quarter and the full-fiscal year by nearly two-thirds. The stock is higher in lock-step, up nearly 40% since June.

For CEO John Chen, the task ahead is two-fold: get the business back on a sound financial footing, and come up with a new money-making strategy. There’s reason to be optimistic on both of these fronts.

Sales of the company’s new Passport handset have far surpassed anyone’s expectations. The square-shaped smartphone is designed for business users who write emails, study spreadsheets, and read documents on their phones. BlackBerry sold 200,000 units in the first two days of the launch, selling out within a few hours.

Mr. Chen has promised investors that he will return the company to cash flow breakeven by fiscal 2016. However, a successful handset launch could push that timetable forward. Some analysts are even talking about the company getting back into the black as early as this quarter.

BlackBerry is playing the long game, as well. The company is making a big push into mobile-device-management, the software that helps businesses control all of the gadgets their employees use in the workplace. In November, shares hit a 52-week high after the company unveiled new software and a series of partnerships. This included a deal that will see its enhanced security offered on Samsung Electronics Co Android devices.

And yet, BlackBerry may still have its eyes on an even bigger prize: the Internet of Things. In the future, we’re going to see more examples of machines wirelessly talking to machines. BlackBerry wants to be in the middle of those digital conversations.

In May, the company launched Project Ion. This includes a series of initiatives to collect data and provide cloud-based services to customers. If it works, BlackBerry could be on the forefront of a new industry.

And the prize here could be big. According to Cisco Inc CEO John Chambers, the Internet of Things could be a US$17 trillion industry by 2017. That would make the smartphone wars of the past decade look like a skirmish.

In BlackBerry’s upcoming report, look for more details on these new businesses. CEO John Chen needs to give shareholders a better sense of what’s ahead. If he can convey that vision, the stock could have enormous upside from here.

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Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Apple, Google (A shares), and Google (C shares). Tom Gardner owns shares of Google (A shares) and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares).

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