Revenue falls to $976 million
BlackBerry executive chairman and chief executive John Chen is turning his attention to growth for the struggling company, which has been slashing costs to survive.
CEO John Chen
Chen said, in the short term, that means growing its software and services business including its popular BBM service, and embedded software like QNX.
“We just need to make sure that we do it in a well-paced manner and don’t want to get too much ahead of ourselves,” Chen told a conference call on Friday with financial analysts after the company reported better than expected results.
“I’m very pleased with the fact that the company’s now back in execution mode,” he said.
BlackBerry Ltd., which has been restructuring and cutting costs at a torrid pace, reported a fourth-quarter loss of US$423 million or 80 cents per share, compared with a profit of $98 million or 19 cents per diluted share a year ago.
However, excluding several one-time items, BlackBerry says it reported an adjusted loss from continuing operations of $42 million or eight cents per share for the quarter.
The average analyst estimate compiled by Thomson Reuters had been for a loss of 55 cents per share for the quarter.
Revenue fell to $976 million for the three months ended March 1 compared with $2.68 billion a year ago. Analysts had expected about $1.1 billion for the latest quarter.
Chen, who took over late last year, said the company’s normalized use of cash from operations was now 30% lower compared with last quarter.
“I think the numbers show we are about a quarter ahead of schedule at this point,” he said.
In its outlook, BlackBerry says it is targeting break even its cash flow results by the end of its 2015 financial year.
The revenue breakdown for the quarter included about 37% from hardware, 56% for services and 7% for software and other revenue.
The company said it recognized hardware revenue on approximately 1.3 million BlackBerry smartphones in the quarter.
BlackBerry had $2.7 billion in cash, cash equivalents, short-term and long-term investments of March 1.
Earlier this week, BlackBerry said it was about to launch an update to its popular BlackBerry Messenger chat service that it hopes will see some revenue growth through sponsorships with brand names, and a new BBM store that deals in virtual goods.
BBM’s user base has grown to more than 85 million since the chat service became available to iPhones and Android devices.
BlackBerry is looking to start a virtual store that will heavily promote a line of virtual stickers that can be used in messaging to convey emotions.
The company hopes to expand the stickers — which are popular in Asia — to include partners that will either share revenues from sales or pay BlackBerry to give out stickers that promote a product.
The company also hopes to turn BBM into a mobile financial services tool that will allow users to link their bank account to their phone for easier payments.
The company has been cutting costs and restructuring its business in a bid to stay alive including a plan to eliminate of about 40% of the company’s workforce.
Last week, Blackberry announced it had signed a deal to sell a majority of its Canadian real estate holdings — more than three million square feet of space and vacant lands — and lease back a portion.
The deal followed the sale in December of a handful of buildings to the University of Waterloo for $41 million under an agreement that would also allow the company to lease back some of them.
And earlier this month, BlackBerry sold its U.S. headquarters in Irving, Texas, to Brookfield Property Group for an undisclosed amount. The company plans to lease back at least part of the six-building location.
For its full financial year, BlackBerry reported a loss of $5.87 billion or $11.18 per diluted share on $6.81 billion in revenue. That compared with a loss of $646 million or $1.23 per diluted share on $11.07 billion in revenue the prior year.
On the Toronto Stock Exchange, shares in Blackberry were up 5.12% or 51 cents to 10.47 in mid-morning trading.
