TORONTO - BlackBerry (TSX:BB) will reveal some of the most important sales figures yet for its new smartphones on Friday as the company issues its latest quarterly results and provides a glimpse of whether the phones are catching on with customers.
Analysts have offered optimistic, yet cautious, expectations for the Waterloo, Ont.-based company's first-quarter performance.
It will be the first time BlackBerry has provided shipment numbers to the crucial U.S. market for its touchscreen phone, and also the first sign of whether anticipation for the keyboard model translated into sales in several major markets like the U.K. and Canada.
"Expectations have been rising," said Richard Tse, a technology analyst with Cormark Securities Inc.
"I think that broadly, people believe that the initial rollout of these BB10 devices into the carrier channels potentially gives them a bit of momentum in terms of stocking the inventories."
Investors will be looking for any signs that BlackBerry has turned itself around on sales of its new BlackBerry10 devices and whether the trend is expected to continue.
BlackBerry launched its Z10 touchscreen phones, equipped with its new BlackBerry 10 operating system in January. The keyboard Q10 versions were launched months later in Canada, the U.K. and other markets.
The complex rollout of the devices has made it difficult for the technology community to conclude whether the phones are a widespread success.
The U.S. market has lagged behind much of the world, and didn't begin stocking the latest keyboard phone until early June, which means it will take another quarterly report before shipment figures are made public.
Edward Jones analyst Bill Kreher said BlackBerry's biggest draw in the upcoming months is the launch of its lower-priced BlackBerry Q5 phone, which will appeal to customers in emerging markets outside of the U.S.
"The company has lost relevance in the U.S. but still holds some significant share in emerging economies in areas like Indonesia," Kreher said from St. Louis, Mo.
"So it would be critical for them to get those consumers from (the older models) and maintain their subscriber base."
He said sustaining growth will be key to the company's comeback and return to profitability.
"I think the product cycle continues to shorten, particularly given the number of partners in the Android eco-system. It will be difficult for BlackBerry to stay top-of-mind unless it can continue to develop hit products," said Kreher.
In the last quarter, BlackBerry reported that it shipped about one million smartphones on its new BlackBerry 10 operating system. Kreher estimates that number might be upwards of 3.5 million phones in the first quarter.
The company, which formerly called itself Research In Motion, reported a surprise profit of US$98 million or 19 cents per share for quarter ended March 2, compared with $125 million or 24 cents per share loss a year ago. Revenue increased to $2.68 billion.
In a note Monday, RBC Capital Markets analyst Mark Sue forecasted BlackBerry's revenues at $3.5 billion, slightly above the $3.4 billion consensus estimate provided by Thomson Reuters. They put earnings per share at nine cents, compared with a consensus of six cents.
Despite the forecast, the note warned that BlackBerry will face challenges in attracting and growing its customer base.
"Competitive device launches in the second half (of the year) may mean increased spending for BlackBerry to sustain its product refresh," wrote Sue.
"Samsung and Apple, who have significantly more resources, are having a tough time growing their units, so it may be even more difficult for BlackBerry, which is much smaller and still playing catch up."
The note said investors should also anticipate lower profit margins in the next few quarters, with the anticipated launch of the BlackBerry Q5.
Investment firm Raymond James questioned whether the BlackBerry Q5 device would be enough to satiate customers in emerging markets, which was BlackBerry's largest growing subscriber base last year and where it has long benefited from name recognition.
Earlier this week, BlackBerry launched its business service platform for corporate and government workers for rival Google Android and Apple smartphones.
The operating system, called Secure Work Space, allows Apple and Android users to separate their data and work apps, such as email and calendars, from their personal apps bringing a greater level of security.
This feature is already available on BlackBerry 10 phones.
It also announced that it be the official mobile computing partner of Maple Leaf Sports
BlackBerry said the partnership will mean the development of new, interactive apps for sports fans who use the Blackberry 10 devices.
Founded in 1984, BlackBerry devices are now sold through 650 wireless carriers in 175 countries. It has about 76 million subscribers worldwide.
BlackBerry shares closed down 58 cents, or 3.71 per cent, at $15.05 Thursday on the Toronto Stock Exchange.