BlackBerry Announce Better Than Expected Results

23 Dec 2015 | Author: | No comments yet »

BlackBerry Announce Better Than Expected Results.

TORONTO: BlackBerry’s pivot to software began to show traction, after the company reported a smaller quarterly loss and its first quarter-to-quarter revenue increase in over two years, sending its stock soaring 13%. Significantly, gains in software revenue more than offset a steepening decline in legacy system access fees for the first time, and the Waterloo, Ontario-based company said this trend should continue. The company may break even in the current quarter, but this could be complicated by investments being made toward growing both software and hardware sales, said chief executive John Chen, who sees a return to sustainable profitability in fiscal 2017, which begins March 1. The stockmarket liked this news, anticipating something of a turnaround in BlackBerry’s fortunes, and the share price increased by thirteen percent.

BlackBerry has staked its turnaround on software and more aggressively licensing its trove of patents after its once-dominant handsets conceded the consumer smartphone market. “BlackBerry hit a software number that investors have been looking for them to hit for quite some time,” said Morningstar analyst Brian Colello. “I think the investment in security, in software, is the right move.” The better-than-expected results were driven by a sharp jump in software and patent licensing revenues and a higher average selling price for phones, driven by the Priv, its new Android-powered device. “We’re planning on other Android phones, but it all hinges on how we do with the Priv,” said Chen at a media roundtable, adding the Priv will be hitting over 30 countries this quarter. To look at the numbers, BlackBerry’s loss was $89 million ($0.17 a share), compared with a loss this time last year of $148 million ($0.28 a share). Quarterly revenue fell 31% to US$548mil (RM2.3bil) from a year earlier, but rose 12% from the prior quarter, after nine consecutive quarters of declines. BlackBerry have been reinventing themselves as a software business for some time now but this is the first tangible evidence that the transformation is working.

BlackBerry sold 700,000 devices, down from about 800,000 in the prior period, but average selling prices jumped to US$315 (RM1,355) from US$240 (RM1,032). This is a smaller number of device sales compared with the previous quarter’s 800,000, but at a significantly higher price as the previous period, the average price was $240.

John possibly sees the hardware sales business turning the quarter into the end of 2015 but it appears that device sales hinge on the success, or otherwise, of the BlackBerry Priv but BlackBerry wish to keep making devices and licensing software at the same time.

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