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BlackBerry results top expectations

Published on NewsOK Modified: June 19, 2014 at 9:11 am •  Published: June 19, 2014
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TORONTO (AP) — BlackBerry surprised Wall Street by posting financial results that beat analysts' expectations.

Shares rose almost 12 percent in morning trading as CEO John Chen cut expenses quicker than expected.

The embattled smartphone company reported net income of $23 million, or 4 cents per share, for the three months ended May 31. It had reported a loss of $84 million, or 16 cents per share, a year ago.

Excluding unusual items, its adjusted loss was 11 cents per share in the latest period. Analysts surveyed by FactSet expected a loss of 35 cents per share.

Revenue fell to $966 million from $3.07 billion a year ago. Analysts expected revenue of $961.7 million.

Shares rose 96 cents, or 11.6 percent, to $9.25 in morning trading.

"We are getting very close to making money or at least break even on hardware. Not quite there yet, but close," Chen said on a conference call with analysts.

It is the third quarterly results under Chen, who is deemphasizing the hardware business after last year's launch of the BlackBerry 10 failed to spark a turnaround. The BlackBerry has been hammered by competition from the iPhone as well an Android-based rival.

"He's doing exactly what John Chen should be doing. He's right sizing the business to fit demand. He is focused in the areas where he is still relevant. He's cut partnerships to shore up weaknesses," said Colin Gillis, an analyst at BGC Partners. "If they can get this business where they are selling a million phones a month they'll be a nice little niche. It will be a nice little profitable business."

BlackBerry sold 2.6 million phones in the quarter and reported cash and investments of $3.1 billion. Chen said 80 percent of BlackBerry's 50 million subscribers are business users.

"People stay with BlackBerry because they're enterprise users, there's high productivity and security. I would say 80 percent of that 50 million is this perfect base for us," Chen said.

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