BlackBerry has reported a bigger-than-expected drop in third-quarter revenue, sending shares of the struggling smartphone maker lower, even as it eked out a small adjusted profit and began generating cashflow again.
Revenue fell to $793 million (€646 million) from $1.19 billion (€970 million) a year earlier, falling short of analysts’ expectations of $931.5 million (€759 million). BlackBerry’s Nasdaq-listed shares fell 5.7 per cent to $9.50 (€7.74) in premarket trading.
“Revenue missed consensus by a sizable amount, which is especially troubling because it included one month of new BlackBerry Passport sales,” said Morningstar analyst Brian Colello, referring to Blackberry’s unconventional new smartphone, which has a large, square touchscreen and keyboard.
Chief executive John Chen said hardware sales in the quarter were weaker than expected as production was limited and the company could only fulfil all device orders early in the fourth quarter.
Cash flow was positive $43 million (€35 million) in the third quarter, versus negative cash flow of $36 million (€29.3 million) in the second quarter. BlackBerry had said it was targeting break-even cash flow by the end of the fiscal year in February 2015.
Colin Gillis, tech analyst at BGC Partners in New York, said Mr Chen had done a good job controlling expenses.
Excluding a one-off non-cash debenture charge and restructuring charges, the company reported a profit of one cent a share. Analysts had expected a loss of five cents.
The company reported a net loss of $148 million (€120.6 million), or 28 cents a share, in the quarter ended November 29th. That compared with a year-earlier loss of $4.4 billion (€3.58 billion), or $8.37 a share.
BlackBerry launched its long-awaited Classic smartphone on Wednesday, hoping to help win back market share and woo customers still using older versions of its physical keyboard devices. The phone resembles its once wildly popular Bold and Curve handsets.
Separately, BlackBerry completed its acquisition of Secusmart, a privately held firm specialising in voice and data encryption. – Reuters
