Newspaper article The Canadian Press

BlackBerry Reports Q2 Profit, Higher Sales from Software and Services

Newspaper article The Canadian Press

BlackBerry Reports Q2 Profit, Higher Sales from Software and Services

Article excerpt

BlackBerry shares surge on Q2 profits


BlackBerry Ltd. (TSX:BB) chief executive John Chen touted the company's progress in its strategic shift away from its legacy handset business after it reported record software and services revenue on Thursday, sending its shares up as much as 17 per cent.

The Waterloo, Ont.-based company reported US$19 million in net income for its fiscal second quarter, a big swing from the loss reported during the comparable period last year.

Its software and services revenue for the quarter ended Aug. 31 hit a high of $185 million, comprising roughly three-quarters of the total for the period.

BlackBerry CEO John Chen said Thursday this metric, as well as the company's improved margins, is a reflection of "our compete transformation to a software company."

"We made great progress in all our key growth initiatives... all of these accomplishments position us well for future growth," he told analysts on a conference call this morning.

Shares of BlackBerry in New York were up as much as 17.3 per cent to US$10.83 in intraday trading. The Waterloo, Ont.-based company's shares in Toronto were up as much as 16.8 per cent to $13.47.

BlackBerry has made a strategic pivot in recent years away from manufacturing its namesake smartphones to producing mainly software and services as its devices lost market share to Apple Inc.'s and Samsung Electronics Co.

BlackBerry's revenue for the three months ended Aug. 31 was US$238 million, down from $334 million in last year's second quarter but up $3 million from the previous quarter ended May 31.

The company's profit in the latest quarter amounted to four cents per basic share, reported in U.S. currency. That compared with a year-earlier loss of 71 cents per basic share, or US$372 million in total.

Michael Walkley, an analyst with Canaccord Genuity based in Minneapolis, said the upside this quarter was "more one-time in nature," helped by some non-recurring licensing items. Still, BlackBerry's latest results show it is making headway on its long-term goals, he added.

"The company's definitely making progress on longer-term objectives, and putting up another strong quarter relative to consensus easily explains why the stock's up," Walkley said Thursday. …

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