BlackBerry shares rally after Q4 results beat estimates
WATERLOO, Ont. — BlackBerry Ltd.’s stock price jumped Friday after the smartphone-turned-software company said it expects to make an adjusted profit this year and posted results that, though still in the red, beat Bay Street expectations.
The Waterloo, Ont.-company reported a loss of US$47 million or US9 cents per share in the three months ending Feb. 28, shrinking its loss of US$238 million or US45 cents per share in the same period last year. On an adjusted basis, it earned US4 cents per share, beating analysts’ predictions that it would break even.
The company also did better than the estimate of a net loss of 13 cents per share and revenue of $289 million, according to Thomson Reuters data.
Yet investors rallied behind the stock as the company showed signs of success in new software ventures it pursued after its smartphone business collapsed from its former glory as customers flocked to Apple and Android devices. In September, it announced plans to stop internal smartphone development altogether.
BlackBerry shares jumped 15 per cent in morning trading in Toronto after the results were released. It hit its full-year target of 30 per cent growth in its software and services business, signed more than 3,500 customer orders in the last quarter and expects to grow at a faster pace than the market in fiscal 2018, CEO John Chen said in a call with analysts.
He expects his company to grow between 13 and 15 per cent, above the anticipated market growth rate of 10 to 12.5 per cent.
“We think we can do better than that,” Chen said, pointing to its QNX automotive software division and its fleet management software as particular growth drivers. BlackBerry also expects more revenue from enterprise and government clients and mobile software licensing.
“Not everything will work as you all know, but I think we’ve got enough irons in the fire that the combination of that makes us feel comfortable with our numbers,” he said.
Its manufacturing partners recently launched two smartphones that will bring royalty revenue depending on sales in the coming quarters. While BlackBerry will not reveal how much it earns per device, Chen said he believes multi-million units will sell annually.
“I will personally be disappointed with a million units,” he said.
One of its manufacturing partners might even launch a BlackBerry-branded tablet, he said, though he stressed that he’s not making the hardware.
Chen said he was very bullish when it comes to automotive software. BlackBerry’s infotainment systems — these sell for about $3 to $5 per car — are already in 60 million cars, but he hopes to sell this alongside four or five other in-vehicle applications currently in development.
“Rather than getting a set amount of dollars per car when you roll it out the manufacturing line we want a service component of that on a monthly basis,” he said.
BlackBerry also reported lower costs this quarter as it shifted resources to software and scaled back certain jobs. Ford recently hired 400 of its engineers.
“We no longer designed hardware, antennas, keyboards we no longer need engineers in the factories helping building devices,” Chen said.
Still, he said BlackBerry hired 1,000 people last year and intends to increase its headcount. He announced plans to reorganize the company and the way it reports financial results.
BlackBerry reported an annual loss of $1.2 billion for fiscal 2017, nearly six times more than it lost the prior year due to disappearing revenue in its hardware segment.