Can BlackBerry Win With Earnings This Week?

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BlackBerry Ltd. (NASDAQ: BBRY) remains on a path to a turnaround under new CEO John Chen. Or does it? Getting excited about anything at BlackBerry these days seems very hard to do, but Chen has been making progress where he can. This Thursday’s expected earnings report may seem as though it is hard to look for anything good — on top of losses and perhaps lower sales numbers continuing.

BlackBerry has been moving to a fab-lite model. It has given up on trying to be the consumer first choice for handsets, but it has not given up on the enterprise market nor on the international markets.

When BlackBerry reports earnings this Thursday, it is widely expected that the company will post wide losses and a decline in sales. Thomson Reuters is calling for a loss at $0.25 per share (versus -$0.13 EPS a year ago) and a 68% decline in revenue to $963.9 million for the last quarter.

For the coming year (Feb. 2015), Thomson Reuters has its consensus estimates as being -$0.94 EPS (versus -$1.35 EPS last year) and $3.94 billion in revenues (down 42% from $6.81 billion a year ago).

Where BlackBerry’s story gets more than interesting is in the charts. At $7.84 in late Monday trading, BlackBerry’s share price is wedged between the 50-day and 200-day moving averages — $8.21 for the 200-day and $7.53 for the 50-day. Each longer-term moving average has acted as a form of chart resistance since March.

Another issue for traders to consider is the BlackBerry short interest. As of the May 30 settlement date, BlackBerry’s short interest was over 93.4 million shares. This is a massive number at more than 12 days to cover, but we would point out this is actually the lowest short interest reading on a raw share count basis over the past year. The short interest was nearly double this amount a year ago.

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At $7.84 in late trading on Monday, BlackBerry’s trading range has been $5.44 to $15.09 over the past 52-weeks. The consensus price target is also right at the current price as Thomson Reuters represents the analyst mean target price of $7.87.

We will offer more details and units expected to be sold and ongoing restructuring efforts as the report approached closer.