Faithful BlackBerry Seen stemming Sales Slide: Corporate - Bloomberg

BlackBerry is poised to snap a five-quarter streak of declining smartphone shipments, a sign its recovery is Gaining traction.

BlackBerry

probably delivered 7.7 million smartphones to customers in the three months ended in May, a Bloomberg survey of analysts shows. That would reverse a plunge to 6 million units in the prior quarter from 11 million a year Earlier for the Waterloo, Ontario-based company.

New models are the reason for the resurgence. Even if the touch-screen Z10 is getting a mixed reception consumer, pent-up demand for the Q10, Which has a physical keyboard to appeal to the BlackBerry faithful, is fueling a rebound, said Maynard Um, and Wells Fargo & Co.. analyst.

“The die-hard BlackBerry installed base of 76 million subscribers loyal to the keyboard presents a strong opportunity to upgrade,” said Um, who is based in New York and rates the stock the equivalent of a buy.

Um

is among analysts who have raised sales estimates or ratings on the BlackBerry in the weeks before the smartphone maker reports earnings on June 28th While BlackBerry steadily lost market share over the past three years that Apple Inc.. (AAPL) and Samsung Electronics Co., It now has an opportunity to win back some consumers in the lull before the next iPhone arrives and after Samsung’s Galaxy S4 got mixed reviews.

“The new BlackBerry handsets are holding up reasonably well against a number of recently released handsets,” said Andy Perkins, an analyst at Societe Generale SA in London. Perkins lifted his rating on the BlackBerry from a sell to a buy last week, citing the phones’ better sales momentum.

Fumble

Culmination

BlackBerry has climbed 18 percent this year in New York trading and has more than doubled since reaching a nine-year low in September. An international BlackBerry service disruption That month, Which coincided for a second time with the introduction of a new iPhone, was the culmination of years of marketing fumbles, product delays and other missteps by the company.

Since taking over in January 2012, Chief Executive Officer Thorsten Heins has named new sales, marketing and legal chiefs and squeezed out $ 1 billion in operating costs by cutting six of 10 manufacturing sites, Eliminating 5,000 jobs and selling one of two corporate Jets.

BlackBerry

surprised analysts in March by reporting a return to profitability for its fiscal fourth quarter, Earlier than expected. The company probably had a profit of 9 cents a share excluding one-time charges and gains in the first quarter, Which ended in May, reversing a loss of 37 cents a year Earlier, According to analysts’ estimates.

Sales Gain

Sales probably climbed 20 percent to $ 3.38 billion from a year Earlier, the estimates show. That would be the first year-on-year gain in eight quarters.

BlackBerry has no comment on its performance last quarter, said Rebecca Freiburger, a company spokeswoman.

Heins, a native of Germany, was criticized after he was promoted from chief operating officer to CEO 18 months ago and told investors no “drastic change” was needed at the BlackBerry.

Regardless of what he said at the time, Heins has definitely shaken things up, said Colin Gillis, a BCG Partners LP analyst.

“He’s done a great job – he’s put up way more of a fight than people were expecting,” said Gillis. “The question is, is it too late?”

Twenty-two analysts, Including Gillis, BlackBerry and sell rate, 12 call it a hold, while nine recommend buying the stock.

Q10

Peak

BlackBerry’s shipments are expected to decline again this quarter. In the current period, Which will end in August, units will decline to 7.4 million from last quarter’s estimate of 7.7 million, According to the Bloomberg survey. That’s because shipments of older models will fall while sales of the Q10 will Potentially peak after a wave of upgrades, Gillis said.

“This is the quarter where they’re Likely to put the product into the channel and the small numbers look pretty good,” he said. “The next quarter is probably going to be tough for them.”

BlackBerry’s share of the global smartphone market shrank to 2.9 percent last quarter from 6.4 percent a year Earlier, According to IDC research. Apple’s iOS and Google Inc. ‘S Android operating system, Which Samsung uses, together accounted for 92 percent of the market.

BlackBerry was knocked out of third place by Microsoft Corporation.’s Windows Phone platform, Which finished March with a 3.2 percent share. Still, Microsoft’s new phones have not made huge inroads with consumers, leaving the BlackBerry in the running for third place, said BGC’s Gillis.

Stacy Drake, a Microsoft spokeswoman, declined to comment.

“Microsoft have not blown the doors off That space is secure That third space in the ecosystem,” said Gillis. “It’s still an open race.”

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor Responsible for this story: Nick Turner at nturner7@bloomberg.net