BlackBerry shares jump 10% on better than expected financial results
CEO John Chen says new Priv device well received
BlackBerry shares jumped more than 10 per cent Friday after the release of a quarterly financial report showing the smartphone company's revenue was above expectations and its loss was far less than anticipated.
The company's stock closed at $12.03 in TSX trading, up $1.14 from Thursday's close.
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BlackBerry's revenue was $557 million US, which was $64 million above the general estimate and up from $548 million US a year ago.
Its net loss was $89 million US or 17 cents per share under standard accounting rules. After adjustments, BlackBerry's loss was $15 million US or three cents per share — far less than estimates.
Analysts had projected that BlackBerry would report an adjusted loss of 14 cents per share and $489 million US of revenue for the quarter, according to Thomson Reuters.
Chief executive John Chen says the company saw higher revenue across all areas of its focus, including software, and it will increase spending on the launch of the newest BlackBerry smartphone — the first with an Android operating system.
Chen said the new Priv device has been well received since it was launched in November, late in the company's third quarter ended Nov. 28, but the company did not provide any device sales figures to gauge its performance.
"Numbers will tell us but the initial 30 days, so to speak, has been quite positive, and I don't want to over hype that situation," Chen told analysts Friday.
Hardware revenues, which account for device sales, dropped to $214 million from $361 million a year ago.
Software and services revenue more than doubled to $154 million from $57 million a year ago, as BlackBerry shifts its primary focus to driving recurring subscriber fees from its business clients.
"BlackBerry has a solid financial foundation, and we are executing well," Chen said in a statement before a conference call.
"To sustain our current direction, we are stepping up investments to drive continued software growth and the additional Priv launches. I anticipate this will result in sequential revenue growth in our software, hardware and messaging businesses in our software, hardware and messaging businesses in Q4."
Chen has said previously that BlackBerry needs to sell five million phones in the current fiscal year to break even.