Blackberry reported a fourth quarter profit, signalling a possible end to their losses in previous years. Investors and analysts are showing confidence in the company’s new software-based sales model.
The unexpected profit was celebrated by investors, showing solid growth in the company’s revenue from its high-margin software products. Blackberry’s small software division provides systems that allow companies and government agencies to manage multiple employee devices. The software systems include the QNX operating system which can be used in mobile phones, vehicles and reactors. The company shifted its focus from its traditional hardware and services driven sales model, which proved to be a smart executive decision considering that the software revenue rose to US$67 million, a 20 percent increase from the year before.
The company’s stock price rose by 5.1% to $9.77 on the Nasdaq and a net profit of US$28 million (or 5 cents per share) was reported for the fourth quarter which ended on February 28th 2015. The company ended the previous year with a loss of US$148 million (or 28 cents per share). Analysts expected a loss of 4 cents per share on average prior to the release of the earnings. “Our financial viability is no longer in question. We’re now turning our attention to revenue stabilization,” said BlackBerry Chief Executive John Chen. “We intend to do better,” he added, confirming that the corporate has its sights set on continual growth. Blackberry’s positive cash flow also rose from the previous quarter to US$76 million.
However, the company’s revenue fell from US$793 million to US$660 million, below estimates of around US$786.4 million. “BlackBerry continues to do a good job controlling operating expenses and eliminating its cash burn during its business transition, but the total revenue was still a big miss and we still have concerns about the demand side,” commented Morningstar analyst Brian Colello.
“It’s an early good sign,” Colello added. “They are looking for a more meaningful ramp in the middle of fiscal 2016, but certainly it’s a good start.” The results prove that Blackberry is still in the game, with added strength having survived a steep downfall, and they plan to remain a strong contender in the IT business.