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BlackBerry Ltd. revenues fell short of expectations on Tuesday, adjusted or not, and stocks fell in the extended session as executives described negotiations to sell patents that generate licensing income.
BlackBerry BB,
As of Tuesday afternoon, fourth-quarter losses stood at $ 315 million, or 56 cents per share, after posting losses of 7 cents per share a year ago. After adjusting the modified value of convertible debt added more than $ 250 million to net income, the Canadian technology company reported earnings of 3 cents per share, down from adjusted earnings of 9 cents per share it a year ago.
Fourth-quarter revenue was $ 210 million, compared to $ 282 million in the same period last year. Analysts on average expected adjusted earnings of 3 cents per share on sales of $ 245 million.
BlackBerry reported adjusted revenue of $ 215 million, as part of a practice of reporting non-GAAP revenue, or non-GAAP revenue, which began in 2019. The company recently told the Securities and Exchange Commission that it would end the practice. , which MarketWatch detailed from 2019 as being against SEC rules, during the current fiscal year.
Executives attributed some of the shortfall to limited patent licenses, explaining that BlackBerry is trying to sell some patents to an anonymous buyer.
“We have entered into an exclusive negotiation with a North American party for the sale of a portion of the company’s portfolio, primarily related to mobile messaging and wireless networks,” Chief Executive Officer John Chen said at the meeting. ‘a Tuesday afternoon conference call, later adding that BlackBerry “limited these licensing activities during the quarter due to negotiations and accounting rules.”
BlackBerry sold certain patents to Huawei Technologies Co. Ltd. earlier this year and entered into a patent licensing agreement with Facebook Inc. FB,
While BlackBerry is widely known for its early mobile phones that included physical keyboards, it has grown into a software company focused on cybersecurity and the automotive markets. Reports from Canada suggest the company is looking to cash in on patents related to the mobile technologies it helped create while retaining intellectual property related to cybersecurity.
For BlackBerry’s full fiscal year 2020, which ended at the end of February, the company reported adjusted earnings of 18 cents per share on GAAP sales of $ 893 million.
Chen noted that a forecast for 2021 was made difficult by patent negotiations. He said if a sale did not materialize, BlackBerry would expect $ 100 million in annual license revenue. For its core software and services business, Chen forecast annual sales of $ 675 million to $ 715 million. Analysts were forecasting annual sales of $ 1.02 billion on average, according to FactSet.
The company’s stock gained popularity late last year, pushing prices to a five-year high, but withdrew from its highs – a dynamic that was largely responsible for the adjustment of the fair value that drove adjusted earnings. Shares fell more than 7% after-hours trading on Tuesday after the results were released, after the regular session closed with a gain of 1.5% to $ 9.34. The stock has more than doubled in the past year, gaining 138.9% thanks to the S&P 500 SPX index,
increased by 51.2%.
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