BlackBerry’s banner year hits snag as revenue dips

BlackBerry chief executive John Chen defended his plan to increase the software side of the business, as its shares tumbled Friday.

The company said first-quarter revenue came in at $235 million, down from $400 million a year ago.

On the Toronto Stock Exchange, BlackBerry shares slumped 12.28 per cent or $1.80 to close at $12.86. That setback came after its stock had gained momentum in recent weeks, hitting a four-year high earlier this month.

In a meeting with members of the press, Chen said he believes analysts expected last quarter’s onetime $27 million in professional services revenue would reoccur.

Still, BlackBerry outperformed on a number of other benchmarks, including net income, where it reported a profit of $671 million, a turnaround from the $670-million loss in the same quarter a year ago.

The lower-than-projected sales struck a negative note in what has otherwise been a banner year for the company. Shares have surged more than 60 per cent as investors started treating BlackBerry like the growing software company it has turned itself into.

The latest quarter was boosted by a one-time payment it received as a rebate on licensing fees from chipmaker Qualcomm — one of its suppliers — after an arbitrator ruled in BlackBerry’s favour in a dispute over the fees.

Chen said he expects revenue from licensing and some software services to increase in the latter half of the company’s financial year.

BlackBerry plans to release the entry-level version of Radar called Radar Light, a fleet tracking technology, in the fall. It will be developed for smaller companies. It hopes to move from sales of eight million to 28 million units. Among those using Radar is FedEx.

The $814-million payment from Qualcomm boosted BlackBerry’s cash balance to $2.6 billion, which Chen said he intends to use to finance acquisitions.

The Canadian Press with files from Bloomberg