BlackBerry beats expectations with $23 million Q1 profit, revenue falls
David Friend, The Canadian Press
WATERLOO, Ont. - BlackBerry delivered a surprise to investors, earning a $23-million profit in its most recent quarter as its efforts to remodel its smartphone business made some headway.
Shares in BlackBerry (TSX:BB) jumped 10.8 per cent, or 97 cents, to $9.97 in noon trading on the Toronto Stock Exchange on Thursday.
BlackBerry chief executive John Chen stood before shareholders for the first time on Thursday and assured them the smartphone company has plenty of ideas to ensure its survival.
“Everything BlackBerry does is about security _ we will not lose that fight,” he said at the company’s annual meeting in Waterloo.
After months of working to improve BlackBerry’s financial results, Chen offered a preview of what’s next for the technology firm, which included a few new devices and a plan to focus more on the future of its services business.
He lifted the veil on a new keyboard smartphone called the Passport, which features one fewer row of keys and a screen that fits more characters per row.
A cloud-based service from its QNX division, which develops technology for automobiles, is also part of a plan for the company to dive into the “Internet of Things,” a buzzy phrase that has been used to describe technology that connects objects to wireless networks and can be done through smartphones.
“This is going to be a huge trend in five years and we’re going to build up to it,” he said.
Chen has said he aims to make BlackBerry a break-even company by the end of the fiscal year with a target of rising to profitability in its 2016 financial year.
“Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement,” he said in a statement.
Chen was hired last year to reshape BlackBerry’s business model, cut costs and lead an effort to help the company find a better footing in the highly competitive tech sector.
BlackBerry is now dedicating more resources to serving business and public sector customers after a failed attempt to compete with Apple’s iPhone and the various smartphones on the Android operating system that dominate the consumer market.
The Waterloo, Ont.-based smartphone maker said the profit amounted to four cents per share, compared with a loss of $84 million or 16 cents a year ago.
On an adjusted basis, BlackBerry reported a loss of 11 cents per share, which came in above analyst estimates of a loss of 26 cents, according to Thomson Reuters.
However, revenue tumbled to $966 million for the three months ended May 31, compared with $3.07 billion a year ago.
During the quarter, BlackBerry booked revenue for about 2.6 million smartphone sales, which is an increase from the revenue from 1.3 million devices a quarter earlier.
The results demonstrate that the company is “firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio,” Chen said.
BlackBerry also boosted its cash holdings to $3.1 billion, from $2.7 billion in the previous quarter, with the help of a tax refund and money from the recent sale of real estate assets.