Despite many attempts to kill it, BlackBerry is the communications company that refuses to die. The stock price of BlackBerry Limited (TSX:BB) punched through the $10 barrier for the first time since last December after reporting its latest results.

The fourth quarter was stronger than analysts’ forecasts, and its shares rose 15 per cent to $10.66 in early trading in Toronto before settling to $10.30 at the closing bell. BlackBerry’s net loss under general accounting rules, reported in U.S. dollars, was $47 million, or nine cents per share – a big improvement from the $238-million loss it had at the same time last year. Revenue fell to $286 million for the quarter, down 38 per cent from a year before.

But BlackBerry’s report was more focused on its adjusted profit of four cents per share, which outperformed the consensus estimate. 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.

For the full year ended Feb. 28, BlackBerry had a $1.21 billion net loss under general accounting rules and just $1.31 billion of revenue, which was down nearly 40 per cent from fiscal 2015-16. So it’s still trying to find its feet after riding high in the early part of the century, when the stock price hit an all-time high of nearly $242 in 2007.

Known in its heyday as Research In Motion, the company is transitioning to providing software and technology services. CEO John Chen said that plan was on track, adding the company had one of its strongest quarters to date for software billing. He didn’t rule out new products, but BlackBerry would not be manufacturing any in-house.

“What this might mean, and I make no promise, is that you may soon see a BlackBerry tablet,” Chen said in a conference call from its headquarters in Waterloo, Ontario.

The company has tried this angle before: remember the PlayBook? Released to much fanfare in 2011, the unit stumbled a bit on its launch but regained enough interest after a price reduction to sell some 2.5 million units by June 2013.

There’s no deal in place yet for the new device but Chen noted one of the company’s partners will make the tablet, which will use BlackBerry’s software. The company would receive royalties for each unit shipped.

The licensing deal would be similar to existing arrangements in place with partners who can design, manufacture and sell BlackBerry-branded smartphones in exchange for royalties per phone. Chen said he expects the company to grow its software and services business between 13 and 15 per cent this fiscal year, which is at or above average market growth.

Earlier this year, BlackBerry partner BB Merah Putih launched the Aurora for the Indonesian market. In February, TCL Communication Technology Holdings Ltd. revealed a BlackBerry-branded phone with the classic physical keyboard, which is expected to be sold in Canada and several other countries soon. Chen said he expects to see some revenue from the Aurora this quarter, while TCT’s KEYone device likely won’t start shipping until May.

He said he’d be disappointed with one million units sold, and expects the licensing agreements to pay royalties on multimillion units annually. It seems unlikely at this point that BlackBerry can regain its once-lofty position with Android and iOS platforms dominating the market, but then few thought the company would be around this long.

 

Written By:

Bo Ramone

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