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BlackBerry Stock on Shaky Ground Ahead of Earnings

New CEO Chen doesn't have much room for error

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When BlackBerry (BBRY) reports earnings on Thursday, investors will be looking for the answer to one all-important question: Can the once-dominant and recently battered smartphone manufacturer recover lost market share and profitability? Or have competitors like Apple’s (AAPL) iPhone and Google’s (GOOG) Android delivered the knockout punch?

blackberry stock earnings bbryWall Street is looking for Canada-based BlackBerry to post revenues of $969.6 million in the fiscal first quarter, with a loss of 25 cents per share. As losses have piled up, BBRY investors have grown accustomed to bad news – and analysts have adjusted their expectations accordingly.  For example, the top line estimates reflect a 68% decline year over year.

With that in mind, is BBRY poised to soar or slump after Thursday’s earnings report? And is there anything left to like about the stock? Here are three pros and three cons for BlackBerry stock:

Blackberry Stock Pros

John Chen may be the right leader at the right time: BlackBerry CEO John Chen, who came aboard last November after Thorsen Hines was ushered to the door, gives BlackBerry stock its best chance of reversing the company’s recent bad fortune. Chen has been here before: As CEO of struggling database company Sybase, he identified a hot emerging market — enterprise mobility management — and refocused the company in that niche. Sybase soared. The only question is whether he can do that twice.

Mobile security, Internet of things present opportunities: Enterprise mobility is a huge market opportunity for BlackBerry (as is security), and it is well positioned to deliver on both. Toward that end, BBRY unveiled BBM Protected, the first component of its eBBM suite for secure enterprise-class mobile messaging. With this product, BlackBerry is both enabling access and productivity for mobile workers, while deploying the added security and compliance required by enterprise customers. Chen takes a holistic view of the emerging Internet of Things, starting with BlackBerry Messenger. While handsets and security will drive deployment, gaining the full advantage of machine-to-machine (M2M) communication will require a robust server and network operating system.

Cashing in on mobile payments: BBRY took a giant step forward in its mobile payments strategy last week when it inked a three-year deal with EnStream to support payment transactions between banks and customers. EnStream is a joint venture of three Canadian wireless companies: Bell Canada, Rogers Communications (RCI) and Telus (TU). EnStream will use BBRY’s infrastructure to provide secure payment credentials between financial institutions and mobile operators, enabling any smartphone with near field communication (NFC) — that includes NFC-enabled Android devices and any future iPhone that is NFC capable. This potentially is a huge deal for BlackBerry stock because it is securing the entire network, regardless of payment system, bank, mobile operator or device.

On the other hand…

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