BlackBerry (BBRY) Reports Surprise Profit, Misses on Revenue
Shares of BlackBerry Ltd (BBRY) were trading up +0.50 or +5.38 percent to $9.80 in Friday's premarket after announcing a surprise profit for its fiscal fourth quarter. Nevertheless, revenue failed to meet analyst expectations. BlackBerry Ltd stock closed at $9.30, up +0.02 or +0.22 percent in Thursday's regular trading session.
Waterloo, Ontario based BlackBerry, originally known as Research In Motion Ltd is a Canadian wireless equipment and telecommunications company best known for developing the BlackBerry brand of smartphones and tablets.
BlackBerry Ltd reported GAAP net income of $28 million or $0.05 per share in the company's fourth quarter ended on February 28, 2015, this compares to a loss of $0.08 per share in the fourth quarter last year. On a non-GAAP basis, the company earned $20 million, or $0.04 per share compared to net income of $0.01 per share in the previous quarter. Analysts expected the company to report a loss of -$0.04 per share.
Revenue for the smartphone maker fell to $660 million in the quarter versus $976 million in the same period one year ago, its lowest level in eight years. The figure included a negative impact of $12 million from currency fluctuations. Analysts were expecting the company to earn $786 million in the fourth quarter.
The company recognized hardware revenue on about 1.3 million BlackBerry smartphones, with sales of approximately 1.6 million BlackBerry smartphones sold to end customers with an average sale price of $211 versus an average sale price of $180 in the third quarter. Revenue breakdown for the quarter was about 42 percent for hardware, 47 percent for services and 10 percent for software.
Blackberry Ltd's Executive Chairman and Chief Executive Officer John Chen said in the company's press release that, "Our focus this past year was on getting our financial house in order while creating a multi-year growth strategy and investing in our product portfolio. We now have a very good handle on our margins, and our product roadmaps have been well received, the second half of our turnaround focuses on stabilization of revenue with sustainable profitability and cash generation.
For the company's full 2015 full year, BlackBerry reported revenue from continuing operations of $3.3 billion. BlackBerry's non-GAAP loss from operations for the year was -$45 million or -$0.09 per share. GAAP net loss came to -$304 million or -$0.58 per share. In the company's outlook, BlackBerry continues to anticipate positive free cash flow and is expanding its distribution capacity. The company expects traction from these efforts to begin manifesting some time in 2016.
BlackBerry stock is trading almost five percent higher in this morning's premarket, indicating investors are optimistic with the company's results. BlackBerry surprised the market in the third quarter after reporting a return to profitability. This morning's results are already benefiting the company's stock price and could propel the stock back to the low teens in the long term.
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