What to Watch for in Research In Motion Ltd (BBRY)’s Earnings Report: Apple Inc. (AAPL), Nokia Corporation (ADR) (NOK)

Balance sheet
Of course, BlackBerry’s financial results are also important. However, one-time launch costs probably weighed heavily on last quarter’s profitability. The most important financial metric to watch, therefore, is BlackBerry’s cash and investments balance. Surprisingly, BlackBerry was able to add nearly $1 billion of cash and investments to its balance sheet in the first three quarters of FY13, despite losing money, thanks to solid working capital management and restrained capital expenditures. However, Research In Motion Ltd (NASDAQ:BBRY) now needs to use cash to build up inventory of BB10 devices and to market them. It will be important for the company to reassure investors that it has enough cash to do so; a cash and investments balance greater than $2 billion at the end of the quarter should be sufficient for that purpose.

Foolish conclusion
BlackBerry investors should thus be looking for three things when BlackBerry reports earnings this month. First, did the company manage to hit 1 million Z10 sales (or close to that level)? Second, are iPhone and Android users continuing to switch to BB10? Third, does BlackBerry still have a cash cushion of at least $2 billion? If the answer to all three questions is “yes,” BlackBerry investors could see nice gains this year.

The article What to Watch for in BlackBerry’s Earnings Report originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Apple and BlackBerry, and has the following options: Long Jan 2014 $13 calls on BlackBerry. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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