BlackBerry to Report Earnings on Friday
On Friday, BlackBerry Ltd. (BBRY) is expected to report earnings. If you are hoping that this provider of wireless communications solutions is going to impress, this just might not be the right time according to analysts. While there is mixed sentiment towards these results, most believe that BlackBerry revenue will miss again as a result of slow hardware sales of their new Classic handset. Currently, this technology company makes 46% of its revenue on hardware. This is expected to decline as several key markets failed to receive their shipments of the Classic until halfway through the 4th quarter. According to a report by Morgan Stanley, BlackBerry might have only sold 8,000 Classics in the U.S. during the quarter. On the upside though, the technology company’s global hardware sales may have topped 1.5 million. For Friday’s earnings report, analysts expect revenue of $802 million and a loss of four cents per share. In the last 5 days on the NASDAQ, BlackBerry shares have been down 4.7% and for 2015, these shares are already down 15.8 percent. The stock is also 27 percent below its January 14 high of $12.63.
While conflict in the Middle East might be positive for oil prices, it seems to be having the opposite effect on the stock market. On Thursday, U.S. stocks declined for the 4th consecutive session. Also, the S&P 500 index (SPX) joined the Dow and turned negative for the year, recording its longest losing streak since the beginning of the year. The benchmark index declined 0.2%, or 4.90 points, at 2,056.15 with 8 of its ten sectors closing in the red. Investor sentiment is negative with concerns that the Federal Reserve is likely to increase interest rates by June this year while tensions in Yemen have pushed investors towards safe havens such as the Japanese yen (JPY) and gold. Despite the release of a better than expected report on jobless claims, this seemed to do very little to alleviate investor concerns regarding a slowdown in the economy during the first quarter. Also, the Nasdaq Composite index (COMP) declined 0.3%, or 13.16 points, to 4,863.36 while the Dow Jones Industrial Average (DJIA), which declined more than 100 points in early trade, closed down 0.2%, or 40.31 points, at 17,678.23.
On Thursday, the U.S. dollar (USD) turned and traded higher. This came after data showed that the number of people filing for unemployment assistance in the U.S. last week fell to a 5-week low. As a result, optimism over the strength of the job market was sparked. In their report, the Department of Labor said that the number of number of individuals filing for initial jobless benefits in the week ending on the 21st of March dropped to 282,000, down 9,000. This beat analyst expectations for a drop of 1,000 to 290,000. The previous week’s total was at 291,000. Separately, in another report, data showed that the service sector in the U.S. had expanded at the fastest rate in March since September last year. According to the Markit report, its services PMI (purchasing managers index) increased to 58.6, up from February’s reading of 57.1. In forex trading, the EUR/USD traded at 1.0940, down 0.27%. Against the British pound and the Japanese yen, the greenback traded mixed with GBP/USD down 0.09% to 1.4868 and with USD/JPY down 0.38% and trading at 119.01. Also, the U.S. dollar index was at 97.29, up 0.22%.
As a result of tensions in Yemen as well as poor data out of Japan, crude oil prices declined in Asian trading on Friday. On Thursday, Saudi Arabian government officials stated that they had launched operation ‘Decisive Storm’ in order to defend Yemen and to prevent Houthi militias from gaining control. Also, in Japan on Friday, data showed that the national core CPI, which includes energy but excludes perishables, increased 2.0 percent. This missed expectations for a 2.1% year-on-year gain. Also, the unemployment rate came in at 3.5% for February, down from 3.6 percent in January. Crude oil for delivery in May traded at $50.95 a barrel, down 0.93% on the NYMEX. Also, on Thursday, Brent oil for delivery in May traded at $59.76 a barrel, up 2.61%, on the ICE Futures Exchange in London. This came after the commodity touched a session high of $59.76 a barrel.