[KenFletch]

Just to add...

I see JC as the conservative type of guy... under promise, over deliver type of guy... so his projections should be what analysts should base their estimates on. After all, JC will damn make sure to engineer and achieve his numbers one way or another !
(like the last ER report)

w.r.t handsets...

Yes, selling handsets can make money and can be important.... but not in BB's current position... that has not been a good card to play (right now).

It's like pi$$ing in the wind.... yes, it feels good to have taken a leak... but look at the results.
Not pretty.

Handsets HAVE been making money. Approx half of revenues. Small market share but so what? Not deterring Blackphone. So BlackBerry at present is making money in a niche market. What's with that ?

Right now BlackBerry without handset sales is pretty weak. Perhaps soon it will look different when the software sales are bigger

Posted with my flash Passport

[spiller]

Came across this article today that published a table (labeled Figure 5 in the article) showing one way in which BBRY could achieve software revenue of $500M this year. I am trying to recreate the first part of the table that shows 4.8M paying BES licenses with an annual revenue of only $70M.

My understanding is that silver licenses are $25/y and gold are $80/y. The analyst applies a 20% discount factor; silver $20/y and gold $64/y. Using his assumptions of 4.8M licenses, 20% discount, 25% silver and 75% gold, I get $252 M/y revenue....he calculates only $70 M/y. Can someone tell me what I am missing?

BlackBerry Ltd Should Exit Devices: UBS

I was more confused when they suggest a 1M increase is 46M. Maybe they had an intern who failed basic math running the numbers...

Posted via CB10

[Munx]

Thanx Marlowe. Unfortunately none of that explains the discrepancy in the UBS analyst's spreadsheet calculation.

Posted via CB10

[bbjdog]

And this was just 3 weeks ago that John Chen talking about Hardware.

I really like his facial expression around the 1:14 to 1:30 mark. His smile says a lot.

[Munx]

I was more confused when they suggest a 1M increase is 46M. Maybe they had an intern who failed basic math running the numbers...

Posted via CB10

I can actually get to $46M with a 1M increase in licenses, but I can't get to $70M with 4.8M licenses...no matter which way I slice it. In fact, if each 1M in licenses generated $46M, then 5M licenses should be closer to $250M.

Did UBS totally botch the calc?

Posted via CB10

[doctor gonzo]

Haha! This guy loves his white Passport! Oh, and 24,240 people have watched this video.

[dusdal]

I can actually get to $46M with a 1M increase in licenses, but I can't get to $70M with 4.8M licenses...no matter which way I slice it. In fact, if each 1M in licenses generated $46M, then 5M licenses should be closer to $250M.

Did UBS totally botch the calc?

Posted via CB10

I get similar to your figures as well. Just went to the enterprise shop to confirm license pricing as well.

You would think whoever produced it would just intuitively see that their 1M incremental increase figure is way off proportionally to the first figure.

Also can't seem to find the original report.

Posted via CB10

[chrysaurora]

This revenue calculation is beyond me. Maybe they mean to say X is existing revenue from BES license and getting these many customers would result in NET increase of $y revenue.

Speaking of weird calculations - someone recently talked about having sold only 10,000 devices. Goldman or Morgan. One of them.



Posted via CB10

[Bacon Munchers]

Maybe they feel this week is their last chance to push the SP down....$9.50 is strong support...can they break it downward? Exit short positions prior to the CC. Friday will be interesting. I'm betting it follows the last ER. Strong push down by the bears pre-market and early morning....then the big funds pick up the stock cheap and it recovers and goes higher. Maybe it will sit at $10 again end of the week.

Your theory may hold water. Observe:

[CDM76]

I really like his facial expression around the 1:14 to 1:30 mark. His smile says a lot.

No kidding eh. Keeps trying to hide it but can't. Liking that !!!

Posted via CB10

[Bacon Munchers]

In other OT news:

Apple watch production cut in half. Some say due to lack of AMOLED screens from LG, and others' hold that the market isn't too keen on the gadget.

I go with the latter theory.
Use of Apple watches just means that kids won't be able to stare blankly at their iPhones' while walking across busy streets.

[bungaboy]

OT: Just another crappy BlackBerry Z30 photo . . . taken through a window!

[jake simmons3]

Hey M-8,

Can you comment on the Rockstar patent sale and how this could be seen on this QTR ER.

Rockstar Consortium to Sell 4,000 Patents to RPX Corp. for $900 Million - WSJ

[spiller]

I can actually get to $46M with a 1M increase in licenses, but I can't get to $70M with 4.8M licenses...no matter which way I slice it. In fact, if each 1M in licenses generated $46M, then 5M licenses should be closer to $250M.

Did UBS totally botch the calc?

Posted via CB10

I agree with you...I didn't bother to go into the numbers but they looked very low. My confusion was simply 1M subs is approx 21 percent of 4.8M, where 46M of 70M $ is 66%. That says the additional 21% is worth 66% of baseline. Makes no sense.

Posted via CB10

[spiller]

Hey M-8,

Can you comment on the Rockstar patent sale and how this could be seen on this QTR ER.

Rockstar Consortium to Sell 4,000 Patents to RPX Corp. for $900 Million - WSJ

I'm surprised no one has cleared this up for the non accountants

I think it will be a change in the balance sheet taking $X M from IP and moving it to cash. Cash increases but no impact to EPS or rev? I hope that's not right though....

Posted via CB10

[jake simmons3]

I'm surprised no one has cleared this up for the non accountants

I think it will be a change in the balance sheet taking $X M from IP and moving it to cash. Cash increases but no impact to EPS or rev? I hope that's not right though....

Posted via CB10

well id think it would show up in rev because they sold intellectual property , does this not count as rev?

[Corbu]

Apologies if already posted. From last Friday:
Advantech Forms Strategic Alliance with QNX to Deliver Realtime OS Solutions for Embedded Platforms

[Superfly_FR]

SF still alive, but under heaaaaavy load, still reading, you guys rock !
Trying to free some time for Friday ; I'll be there !
Cheers
SF

[sidhuk]

Internet is filled with attacks on blackberry. This much attention for a company which supposedly dead 3 years ago? The company which has less than .5% market share?
Priceless.

Posted with BlackBerry Passport

[randall2580]

well id think it would show up in rev because they sold intellectual property , does this not count as rev?

As I understand it, it will be listed as a "special item" because it is non-recurring. Just like selling a building or corporate jet. The bump in cash will be positive but it won't affect the view on the ongoing operations.

[morganplus8]

Hey M-8,

Can you comment on the Rockstar patent sale and how this could be seen on this QTR ER.

Rockstar Consortium to Sell 4,000 Patents to RPX Corp. for $900 Million - WSJ

Hi Jake!!

Thanks for the question. As you know, BB owns 17% of Rockstar, they therefore would be eligible for $ 153 MM bucks less costs. That money flows to cash-flow and has nothing to do with earnings; unless there are capital gains associated with it. Depending on how they value the asset, it is possible to net a partial capital gain as an investment, though, we will never know unless they spell it out to us how much they might have made on that asset.

There are a couple of important things here that flow from that transaction that we haven't talked about on this thread. Our favourite analyst must be TD Securities as they value the sum of the parts of BB at $ 13.00/shr. Their report is dated Mar 23th 2015 and yet they are missing some important facts going into this Q4 report. Here is their quote:

"...But Cash Flow Positive. In our mind, BlackBerry has essentially immunized the financials from the device
business. Despite the disappointment on revenue, we estimate that device gross margins in Q3 were 10%+
(compare this with 3–5% in Q2 and negative in Q1). We model the legacy services revenue down 15% q/q.
With flat operating costs, we see an EPS loss of $0.08 (consensus loss $0.04) and CFO of $73mm. One
wrinkle on the cash flow is the proceeds from the sale of Rockstar (the consortium that acquired the Nortel
patents) which could be $130mm-ish and could hit in either Q4 or Q1. We see BlackBerry exiting Q4 with
$3.1bln of cash ($1.9bln of net cash) to invest in new areas of growth.

What's wrong with this statement? They got the Rockstar effect right but they missed out on the $ 300 million in cash equivalent/debt reduction that they received from the Bond issue conversation. I can tell you that $ 300 MM is nothing to ignore! That means that their Net Cash goes from $ 3.1 B down to $ 1.9 B but you have to expect the $ 300 MM to be added onto the final figure. This is important for several reasons, the lowering of the Bond debt dilutes earnings and losses and it increases sum of the parts valuation. How they missed this is beyond me. This is why I don't listen to analysts, they suck at math!

So let's all remember the Bond conversion of $ 300 MM, the Rockstar asset sale and how it effects one time positive gains and the dilution to earnings (which is a good thing when you are expecting a loss) .......... of 30 MM more shares!!!

[plasmid_boy]

My 11yo son set a buy limit at $9.00 a few weeks ago. I laughed at him and said that it's not going to happen - sucks that he is better than me at this...LOL

[spiller]

Hi Jake!!

Thanks for the question. As you know, BB owns 17% of Rockstar, they therefore would be eligible for $ 153 MM bucks less costs. That money flows to cash-flow and has nothing to do with earnings; unless there are capital gains associated with it. Depending on how they value the asset, it is possible to net a partial capital gain as an investment, though, we will never know unless they spell it out to us how much they might have made on that asset.

There are a couple of important things here that flow from that transaction that we haven't talked about on this thread. Our favourite analyst must be TD Securities as they value the sum of the parts of BB at $ 13.00/shr. Their report is dated Mar 23th 2015 and yet they are missing some important facts going into this Q4 report. Here is their quote:

"...But Cash Flow Positive. In our mind, BlackBerry has essentially immunized the financials from the device
business. Despite the disappointment on revenue, we estimate that device gross margins in Q3 were 10%+
(compare this with 3�5% in Q2 and negative in Q1). We model the legacy services revenue down 15% q/q.
With flat operating costs, we see an EPS loss of $0.08 (consensus loss $0.04) and CFO of $73mm. One
wrinkle on the cash flow is the proceeds from the sale of Rockstar (the consortium that acquired the Nortel
patents) which could be $130mm-ish and could hit in either Q4 or Q1. We see BlackBerry exiting Q4 with
$3.1bln of cash ($1.9bln of net cash) to invest in new areas of growth.

What's wrong with this statement? They got the Rockstar effect right but they missed out on the $ 300 million in cash equivalent/debt reduction that they received from the Bond issue conversation. I can tell you that $ 300 MM is nothing to ignore! That means that their Net Cash goes from $ 3.1 B down to $ 1.9 B but you have to expect the $ 300 MM to be added onto the final figure. This is important for several reasons, the lowering of the Bond debt dilutes earnings and losses and it increases sum of the parts valuation. How they missed this is beyond me. This is why I don't listen to analysts, they suck at math!

So let's all remember the Bond conversion of $ 300 MM, the Rockstar asset sale and how it effects one time positive gains and the dilution to earnings (which is a good thing when you are expecting a loss) .......... of 30 MM more shares!!!

Weren't they at either 1.75 or 1.5B bond debt, reducing by 300M to 1.2B bond debt, so net cash is 3.1B - 1.2B debt =1.9B? So didn't they account for the 300M debt reduction?

Posted via CB10

[morganplus8]

Weren't they at either 1.75 or 1.5B bond debt, reducing by 300M to 1.2B bond debt, so net cash is 3.1B - 1.2B debt =1.9B? So didn't they account for the 300M debt reduction?

Posted via CB10

Nope ................ they are using the Bond debt of $ 1.25 B as their pivot point because the stock is below $ 10.00 a share. So if you deduct the $ 300 which they should have done, you would be subtracting $ 950 MM from the cash position. They clearly missed this and that is important when you are throwing out sum of the parts numbers. If they missed the $ 300, you have to conclude that they also missed the dilution of stock factored into Q EPS.



This is clearly the out of the money Bond debt.

[kfh227]

My 11yo son set a buy limit at $9.00 a few weeks ago. I laughed at him and said that it's not going to happen - sucks that he is better than me at this...LOL

Reinforce his thoughts. Time has taught me that greed is great. Most people are greedy when it is time to sell though. And that is the mistake most make. Being greedy on the buy side is what everyone should do. And the beauty is that you can tie your emotions to greed. Most do this anyway when they sell. Do it on the buy and then selling is the easy part that takes no thought.


Wow it is low though. Might be time for some call options.


Posted via CB10