BlackBerry third-quarter revenues top expectations; shares rally

23 Dec 2015 | Author: | No comments yet »

BlackBerry Reports a Jump in Software Sales.

BlackBerry. BlackBerry Corp. reported a narrower third-quarter loss than analysts estimated as software revenue kicked in from its acquisition of Good Technology Corp.OTTAWA — BlackBerry, the smartphone maker that is refocusing its operations on software sales, said on Friday revenue from that segment rose 119 percent in its most recent quarter.

Toronto: BlackBerry Ltd reported a smaller-than-expected fiscal third-quarter loss on Friday and its first quarter-to-quarter revenue gain in over two years, indicating turnaround efforts may be gaining traction. The better-than-expected results, driven by higher hardware and software revenues, sent up BlackBerry shares by 6.3 % to $8.29 in pre-market trading in New York. Excluding a noncash credit tied to a change in the fair value of debentures, restructuring charges and other one-time items, the company posted a loss of $15 million, or 3 cents a share. BlackBerry is racing toward a goal of $500 million in annual software revenue by March 2016, a key part of chief executive officer John Chen’s plan to transition the company away from relying on shrinking handset sales.

The company did not offer early sales figures for the PRIV, the first BlackBerry to use Google’s Android operating system, which arrived in stores during the quarter. Software revenue, a key metric closely watched by analysts as the company pivots its focus to that segment, more than doubled to $162 million from a year earlier.

Software sales were $161.5 million, up from $54 million in the same quarter last year. “That’s encouraging—that tells me they’re on track to hit their $500 million target,” said John Butler, an analyst at Bloomberg Intelligence. Still, BlackBerry left out the number of smartphones it sold in the quarter, a number investors had been looking for to measure the impact of its new Android phone on sales. Although Pandora will pay more in royalties starting next year, CEO Brian McAndrews says the decision by the Copyright Royalty Board offers a “balanced rate.”

Perhaps reflecting the shift to Google’s technology, it spent $100 million on research and development, compared with $154 million during the same period a year ago.

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