Key Takeaways
- BlackBerry’s current quarter guidance was less than expected as the strikes against the Big Three automakers affected its business.
- The company said the walkouts harmed some of its biggest customers and that the impact will likely carry over.
- In the fiscal third quarter, BlackBerry posted a surprise profit and strong sales, boosted by demand for its cybersecurity products.
Shares of BlackBerry Limited (BB) tumbled after the security software maker’s guidance missed estimates because of the six-week strike by workers at the Big Three carmakers earlier this year.
The Canada-based company anticipates revenue for the current quarter, its fiscal fourth quarter of 2024, coming in between $150 million and $159 million, short of forecasts.
CEO John Giamatteo explained the walkout by members of the United Auto Workers union hurt production volumes for some of BlackBerry’s largest customers, noting that “we expect this impact to be felt in our fiscal Q4.” He added that, while there is “no change in strategic direction toward software-defined vehicles, some of the timelines have been pushed back.”
In the fiscal third quarter, BlackBerry posted a surprise profit of $0.01 per share. Analysts had been looking for a loss. Sales were up 32.5% quarter over quarter to $175 million, also better than expected.
The company benefited from a big gain in its cybersecurity business, with revenue of $144 million, a 44% jump from the second quarter and an 8% rise from the year before. Giamatteo noted that the unit secured “large strategic deals with leading government agencies that helped drive strong sequential revenue growth and margin expansion.”
Thursday’s selloff sent BlackBerry Limited shares down almost 13%.
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