BlackBerry (BB) shares fell 17% in early market trading today. The company publishes its results for the second quarter of 2020, ending in February. BlackBerry reported non-GAAP revenue of $ 261 million, a 22% increase over the previous year. GAAP revenue increased 16% to $ 244 million
The company's software and services revenue grew 30% to $ 256 million. Adjusted EPS was $ 0.00 in the August quarter. Analysts expect BlackBerry to post $ 266.2 million in revenue with $ 0.01 EPS in the second quarter.
While BlackBerry beat earnings estimates, its sales were lower than analysts' expectations, leading to a decline in shares. The company reported revenue of $ 214 million and EPS of $ 0.04 in the same quarter a year ago.
BlackBerry estimates revenue growth between 23% and 25% in 2020.
BlackBerry estimates its sales will grow 23% -25% in fiscal 2020. The company expects its revenue to be driven by strong growth in the bills. In addition, the company expects to be unprofitable by GAAP in 2020. The company had earlier projected fiscal 2020 sales to grow between 23% and 27%. Analysts expect BlackBerry sales to grow 23.2% to $ 1
What led to the company's second-quarter sales?
In August, the company's sales were influenced by solid performance in the QNX and Cylance business segments. The company's licensing business also beat its expectations. BlackBerry acquired Cylance for $ 1.4 billion earlier this year.
BlackBerry CEO John Chen said: "We have achieved unsuccessful earnings per share without GAAP and generated free cash flow even with increased sales and product development investments to support future growth.
He also said, "We are encouraged by the positive take on BlackBerry Intelligent Security and we have a number of exciting new products over the next six months."
The company wants to integrate its AI technologies and endpoint management capabilities into one a platform to deal with the growth of endpoint security verticals.
BlackBerry gross margin fell from 76.7% in the same quarter of the previous year to 72.1% in the second quarter of 2020. While sales increased more than 16%, sales, marketing and administrative expenses increased by 24.5% in the second quarter. R&D expenditure increased by 21.6%, while depreciation expenditure increased by 37%.
Due to recent withdrawal, the stock has dropped 12% year over year. BlackBerry shares have fallen nearly 40% since early April.
Investors expect BlackBerry to turn successfully and make a turnaround. However, the company has disappointed investors and analysts with missing revenue and reducing guidance.