After hearing from Jim Cramer on his optimism for BlackBerry, here’s another one from Dan Burrows at the Investor Place, housing a opposing pessimistic view. He believes that the latest quarterly results show BlackBerry to be in better financial shape than it was a few months ago, but profitability and growth are still notional at best. For one, Dan Burrows believes that most turnarounds don’t turn.
Indeed, though, one thing to spruce up the bottom line is by cutting costs. It’s quite another to grow the company by creating demand for BlackBerry smartphones. An adjusted net loss of 8 cents isn’t that far from breakeven, and some analysts think expense reduction can lead BlackBerry to reach that line by the end of next year — but if BlackBerry is to deliver top-line growth, it’s probably not going to come from sales of smartphones.
That is why John mentioned that the company will focus more on provision of services as opposed to hardware. In line with the earnings call where services actually provided more than 50% of the revenue, it is becoming evident that hardware is playing a lesser role to the revenue.
As with what Dan says, selling software and services is what the company is planning to do, it is also what it has left to do.
Now that BlackBerry is liquidating its assets (for example, real estate), which probably added quite a bit to its cash flow, but what is next though? Where would the next flow of cash come from?
Let us know what you think!