BlackBerry has just posted a surprise quarterly profit for the company’s last financial quarter, and said it’s trying to end a slide in revenues. The stock has risen by more than 5% as a result.
BlackBerry has struggled in recent years against smartphone rivals such as Samsung, Apple, and a host of other Android device manufacturers.
BlackBerry back profitability
“Our financial viability is no longer in question. We’re now turning our attention to revenue stabilisation”, said BlackBerry Chief Executive John Chen.
Chen said he intends to grow BlackBerry’s small (but high margin) software division by winning more customers to its products, which includes a system that allows companies and governments to manage multiple employee devices.
Investors in BlackBerry are understandably delighted at the unexpected profit and growth in revenue from software, which includes the company’s QNX operating system that is used in products from cars to nuclear reactors.
Chen said that while the average analyst estimate of a small per-share loss in the current quarter looks reasonable “we do intend to do better”.
“Chen and his team are one of the better management teams out there”, said BGC Partners analyst Colin Gillis. “But they have a lot of selling and a lot of execution to do”.
BlackBerry, which is based in Ontario, reported a net profit of $28 million in the fourth quarter that ended on February 28th. That compares favourably with a loss the previous year of $148 million.
Quarterly profit was posted as $20 million. Revenue however, fell from $793 million to $660 million, which was well short of estimates of $786 million.
“BlackBerry continues to do a good job controlling operating expenses and eliminating its cash burn during its business transition, but the total revenue was still a big miss and we still have concerns about the demand side,” said Morningstar analyst Brian Colello.
“It’s an early good sign,” said Colello. “They are looking for a more meaningful ramp in the middle of fiscal 2016, but certainly it’s a good start.”
BlackBerry also had a positive cash flow of $76 million in the quarter, and its cash rose to $3.27 billion in Q4, from $3.1 billion in Q3.