Why BlackBerry Stock Is Tumbling Thursday

BlackBerry Ltd BB shares are trading lower Thursday after the company reported preliminary second-quarter results. 

What Happened: BlackBerry said it expects second-quarter revenue to be approximately $132 million. IoT revenue is expected to come in at $49 million and licensing and other revenue is expected to be around $3 million. Cybersecurity revenue is expected to total approximately $80 million, which is lower than previously forecasted, primarily due to select government deals failing to close during the quarter. 

"Like many software companies, our Cybersecurity business has experienced elongated sales cycles, particularly in BlackBerry's core government vertical, where we have a strong market position. Given the product mix, delays in closing certain large deals are expected to impact revenue recognized in the quarter. However, we expect to close these deals this fiscal year and are therefore reiterating the full-year outlook for the Cybersecurity business unit given previously," said John Chen, executive Chair and CEO of BlackBerry. 

Due to a shift in the start date for some automakers' software development programs, the company revised its current year IoT revenue outlook. BlackBerry now expects full-year IoT revenue to be in the range of $225 million to $240 million. 

BlackBerry will hold a conference call to discuss the quarter on Sept. 28. 

Following the company's preliminary quarterly results, RBC Capital analyst Paul Treiber reiterated BlackBerry with a Sector Perform rating and price target of $4.50.

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BB Price Action: BlackBerry shares were down 11.9% at $4.89 at the time of publication, according to Benzinga Pro.

Photo: courtesy of BlackBerry.