Disappointment with BlackBerry results

WATERLOO — BlackBerry Ltd. shares sank almost 10 per cent Friday, even though the company beat analysts’ estimates and reported a solid start to its 2019 financial year.

The stock closed at $14.16, down 9.29 per cent, with almost seven million shares traded on the Toronto Stock Exchange.

BlackBerry, which reports in U.S. currency, reported adjusted earnings of three cents per share, beating analysts’ expectations of neutral earnings, while revenue was US$213 million, surpassing expectations of US$208.02 million for the quarter ended May 31, according to Thomson Reuters Eikon.

Revenue from software and services was $189 million, up 18 per cent year-over-year, although growth was unevenly distributed between BlackBerry’s three main business units.

BlackBerry’s enterprise software and services business had $79 million of revenue, down 14 per cent from last year, while revenue from licensing intellectual property was up 96 per cent to $63 million. BlackBerry Technology Solutions, which primarily consists of the QNX business, was up 31 per cent at $47 million.

BlackBerry chief executive John Chen said the quarter makes him “feel good” about BlackBerry’s outlook for fiscal 2019, which began March 1, but said he doesn’t want to be overly optimistic about its growth trajectory — which he said would be gradual, not sudden.

“Sometimes, (if ) you get overly bullish, you jinx yourself,” Chen said in an interview.

Chen said that BlackBerry expects QNX’s automotive products, which include older infotainment software and newer technology for autonomous vehicles, will ramp up gradually rather than repeat the 31 per cent year-over-year growth rate in this year’s first quarter.

He also said the number of vehicles with BlackBerry software has grown to 120 million, from 60 million three years ago.