Connect to share and comment

BlackBerry posts profit in transition quarter

PlacardEnlarge
(Globalpost/GlobalPost)

BlackBerry eked out a small profit in a transition quarter for the Canadian smartphone maker in the midst of its launch of a make-or-break platform to challenge Apple and Android.

The Waterloo, Ontario firm said profit in the fourth fiscal quarter ended March 2 was $98 million, compared with a loss of $125 million in the same period a year earlier.

The results come with the company rolling out new smartphones based on the new BlackBerry 10 platform, seen as its best hope at regaining traction after suffering staggering losses in market share in recent years.

The group said it shipped six million smartphones in the quarter, including around one million BlackBerry 10 units, while its subscriber base slid by three million, to 76 million.

The company unveiled its new platform January 30, as it dropped the corporate name Research in Motion to rebrand as BlackBerry. But sales launches have been staggered, depending on the region. In the United States, the new phones went on sale just last week.

The quarterly data included some sales of the new phones in Canada, Britain, India and Indonesia.

"We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the company returning to profitability in the fourth quarter," said president and chief executive Thorsten Heins.

"As we go into our new fiscal year, we are excited with the opportunities for the BlackBerry 10 platform, and the commitments we are seeing from our global developers and partners."

Heins told a conference call that BlackBerry was getting strong interest from app developers, with more than 100,000 now available.

"Early indicators are that BlackBerry 10 users are hungry for applications, and we're getting more commitments from global app developers daily as our launch continues its rollout."

In the past quarter, revenue slid to $2.7 billion from $4.2 billion a year earlier and was below analyst estimates of $2.84 billion.

But the profit excluding special items of 22 cents a share was a surprise, as analysts had expected a loss of 29 cents a share.

Shares in the company rallied 3.2 percent to $15.04 in morning trade.

Mark Sue at RBC Capital Markets said the results were much better than expected, with stronger-than-anticipated shipments of the new phones.

Peter Misek at Jefferies was upbeat, saying BlackBerry is working to reduce reliance on phone sales and offer its secure software to rivals.

"While most near-term focus continues to be on the phone, we believe BlackBerry's mobile device management opportunity is underappreciated," he said.

This software "will gain traction throughout this year and see a significant ramp in revenues next year," Misek said in a note to clients.

But Paul Ausick at 24/7 Wall Street said the profits masked some bleak figures on lower-than-expected shipments and the loss of subscribers.

"Not a very auspicious start for the renamed company with the brand new smartphone," he said.

jl-rl/dw

http://www.globalpost.com/dispatch/news/afp/130328/blackberry-posts-profit-transition-quarter