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Blackberry, a Self-Driving Car Play Now?

 
 
 

BBRY, BlackBerry Limited

The turnaround story that is Blackberry is in full swing.

Released on Thursday, September 28, 2017, 5:05 PM ET
by Email Russ UrbanContact SpeculatingStocks



Pittsburgh, PA (SpeculatingStocks) - If you think of Blackberry (NASDAQ:BBRY) as that antiquated hardware company with the physical keyboards, think again. Blackberry under the leadership of CEO John Chen has a turnaround story going with the company transforming from low-margin hardware to high-margin software for enterprises and expanding rapidly into autonomous-vehicle (self-driving cars) software.

BBRY is galvanized by its past and moving forward into the future, reinventing itself and capping it off this morning with big earnings surprise. Q2 revenue from software and services came in at $196M vs. $175M expected by analysts. This jump shows that Blackberry is serious and committed to software instead of the low-margin hardware of its past. The company has stopped manufacturing phones. Even more impressive, the company had a profit of 5 cents a share compared to an expectation of break-even.


Blackberry generated $56 million from software licensing fees, up from $16 million over the same period last year. This is a 250% increase and shows serious traction that is expected to continue with the company excited about their growth prospects in self-driving car software. Last October, Blackberry closed a self-driving software deal with Ford Motor Company (NYSE:F) with revenue starting to show up from that deal. The Blackberry CEO is hoping that the company can close another autonomous-vehicle software deal later this year with another vehicle maker.

Earlier this month, Blackberry announced that it was partnering with Delphi Automotive Plc (NYSE:DLPH) to create an operating system for self-driving cars. This shows just how serious Blackberry is about self-driving car software. If Blackberry can corral this market it could generate licensing fees of $5 to even $25 per car. With its infotainment systems, Blackberry earns $1.50 to $5 in licensing fees. There's a pathway for Blackberry to be a major player in self-driving car software, and they know it. Their current market cap of $5.40 billion could look like an extreme bargain once the new CEO has his plans in full sail.

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⇒ About the Author of this News Article:

Russ Urban has been following the stock market for over 17 years and holds a Bachelor's Degree in Finance. From a young age, he watched CNBC with a keen eye and became obsessed with the market and technology. Russ Urban has written hundreds of stock articles and stock picks through the years since he founded SpeculatingStocks.com, Inc. in 2006 and holds strong faith in the power of the markets and capitalism.

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