Blackberry (TSX:BB) shares moved lower before Thursday’s opening bell after the cybersecurity and Internet of Things (IoT) company’s sales outlook disappointed investors.
For 4Q, Blackberry (TSX:BB) projected revenue in the range of $150 million to $159 million, below analyst estimates of about $210 million.
Cybersecurity revenue is expected to be in the range of $83 million to $88 million, lower than the company’s previous outlook, due to a reassessment of the likelihood, size, and timing of some of the large government deals in the pipeline, Blackberry (TSX:BB) said.
IoT revenue is pegged at $62 million to $66 million and licensing and other revenue at approximately $5 million.
BlackBerry's new CEO John Giamatteo said on the company’s earnings call that it was taking a more conservative approach to its 4Q guidance.
He said the company expected to feel the negative impact of the United Auto Workers’ strike on its customers' production volumes during 4Q.
He also noted ongoing slippage of software programs at major automakers. "Leading automakers continue to deal with the challenges of delivering very complex automotive software solutions," Giamatteo told investors.
BlackBerry’s third quarter earnings, however, came in ahead of estimates.
Revenue of $175 million, including cybersecurity revenue of $114 million and IoT revenue of $55 million, topped estimates of $165 million.
The company also reported a surprise profit, with adjusted earnings per share of $0.01. Wall Street analysts had expected a loss per share of $0.01.
BlackBerry shares traded down 5.4% at US$3.88 before the stock market opened on Thursday.