BlackBerry has cut its production by at least 10%, indicating that sales of its new smartphones are running below expectations, research firm Jefferies wrote in a note to investors.
Research indicates that BlackBerry has reduced its production levels by at least 10% recently, just a month after it lowered its production by more than 50%, Jefferies analyst Peter Misek wrote in a note to investors today.
“We believe the build plan cut indicates sell-through is tracking well below [the Street's Aug. quarter] $3.1B revenue estimate.”
The decline suggests that BlackBerry will report lower than expected revenue for its quarter ended in August, the analyst warned.
In another negative development, companies are likely to delay buying BlackBerry’s new smartphones and mobile device management system until later in the year, Misek added. But the analyst believes that these negative trends are not crucial as long as investors continue to focus on the possibility that the company will be sold.
In fact, Misek believes that the stock can advance further, assuming that potential acquirers’ longer term view of the company doesn’t deteriorate.
He kept a Buy rating on the shares but reduced his price target on the stock to $15 from $18.
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