Comeback that wasn't: BlackBerry (BB) slump is far from over

You’d be forgiven for not realizing BlackBerry (BB) is still around.

Once the go-to gadget for white-collar workers — especially in finance — the BlackBerry phone was so addictive it earned the nickname “crackberry.”

The Ontario-based company has since made a full pivot. These days, BlackBerry pitches itself as a cybersecurity firm, building software for devices, cars, and government systems.

This shift, however, has never really paid off for investors hoping for a comeback story from the former smartphone king.

BB stock has lost nearly two-thirds of its value over the past 10 years. It’s also been in the red for seven straight sessions this year.

And based on its latest earnings report released yesterday, the slide may not be over.

Still stuck in neutral

BlackBerry is guiding for Q1 revenue of $107 million to $115 million, falling short of the $125.1 million consensus among Wall Street analysts.

For the full year, the forecast ranges from $504 million to $534 million — again, below the $535.4 million analysts expected.

The company’s QNX unit — its recently rebranded Internet of Things division — is expected to bring in $51 million to $55 million this quarter, compared to the $58.1 million consensus.

Secure communications is also lagging, with revenue expected between $50 million and $54 million, versus $62 million estimated.

Fourth-quarter revenue came in at $141.7 million — down from $152.9 million a year earlier, but ahead of the $129.7 million consensus.

In a bid to refocus, BlackBerry also announced it’s selling its Cylance unit to Arctic Wolf for $160 million in cash (subject to adjustments) plus 5.5 million shares of Arctic Wolf.

After accounting for adjustments, BlackBerry will net roughly $80 million at closing and another $40 million in cash a year later.

BlackBerry bought Cylance in 2019 for $1.4 billion. The unit focused on machine learning–based cybersecurity but never lived up to the hype.

Widely-followed Seeking Alpha analyst Bill Maurer sees the sale as a smart move to shore up the balance sheet.

Still, he’s not bullish on the bigger picture: “Every time you think revenues have hit a bottom, this company finds a way to make them go lower.”

“The company announced strong top and adjusted bottom line beats for the quarter, pretty much as it usually does,” he added.

“However, both current quarter and full year guidance were very disappointing, which likely will mean another meaningful round of analyst estimate cuts.”