BlackBerry surprises with $98M profit
Founder Mike Lazaridis to step down as vice-chairman in May
BlackBerry posted a profit in the fourth quarter as the smartphone maker gave a first glimpse of its performance since unveiling its latest suite of smartphones several weeks ago.
The Waterloo, Ont.-based company reported a profit of $98 million US or 18 cents per share for quarter ended March 2. That's a turnaround from the recent trend: In the same period a year ago, RIM lost $125 million US or 24 cents per share.
The results surprised analysts who, according to Thomson Reuters, were expecting on average a loss of 29 cents per share from the company.
The numbers are the first seen from RIM since the company unveiled its new Z10 and Q10 smartphones in Canada and abroad. However, they don't include sales from the key U.S. market, where the launch was delayed until last week. Those numbers won't be available until June.
The company shipped about one million smartphones on its new BlackBerry 10 operating system in the period, it said. That would include devices sent to retail outlets that landed in customers hands, or also have yet to be sold.
"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," chief executive Thorsten Heins said in a release.
About 55 per cent of BlackBerry's sales were to people who had migrated from other smartphones, Heins said, a hopeful sign the company is managing to expand beyond its core of loyal users.
Lazaridis steps down
In another development, the company's longtime subscriber base, which had been growing until the third quarter, dropped to 76 million from 79 million, a sign more people ditched their older Blackberry models in favour of competitor phones.
"They lost about a million more subscribers than we thought," Jefferies analyst Peter Misek told CBC News after the numbers were released. "But overall this is a better-than-expected result."
Selling fewer older devices that are less profitable ate into the company's earnings, but the uptick in newer models may be enough to power growth.
"The numbers suggest that they're on a recovery path," Misek said. "But the key question is can they execute it."
Revenue increased to $2.68 billion, coming in below expectations of $2.84 billion, according to a poll by Thomson Reuters.
The company also announced co-founder Mike Lazaridis will retire as vice-chairman and director on May 1. Lazaridis, who invented the iconic BlackBerry device almost two decades ago, ran the company along with co-CEO Jim Balsillie until early 2012 when the duo were replaced in a management shakeup.
Lazaridis's departure as chair is the last symbolic link to the company's origins. Although he's retiring after 29 years with the company, Lazaridis says he has no plans to sell his significant holdings in the company. He still owns almost six per cent of RIM.
BlackBerry shares gained almost two per cent or 28 cents to $14.85 in New York on Thursday.
- Blackberry posted a profit of $98 million US, not $94 million as reported in an earlier version of this story.Mar 28, 1970 10:15 AM ET
With files from The Canadian Press