BlackBerry shares are getting a boost in pre-market trading from a quarterly report showing the smartphone company’s revenue was above expectations and its loss was far less than anticipated.
Its third-quarter revenue was US$557 million, which is $64 million above the general estimate and up from US$548 million a year ago.
Its net loss was US$89 million or 17 cents per share under standard accounting rules. After adjustments, BlackBerry’s loss was US$15 million or three cents per share – far less than estimates.
Analysts had projected that BlackBerry (TSX:BB) (Nasdaq:BBRY) would report an adjusted loss of 14 cents per share and US$489 million of revenue for the quarter, according to Thomson Reuters.
Initial stock market reaction to the quarterly report was positive, and the price was up five per cent as the company began a conference call with analysts.
Chief executive John Chen says the company saw higher revenue across all areas of its focus, including software, and it will increase spending on the launch of the newest BlackBerry smartphone – the first with an Android operating system.
Chen said in a press release that the new Priv device has been well received since it was launched in November, late in the company’s third quarter ended Nov. 28, but the company did not provide any device sales figures to gauge its performance.
Hardware revenues, which account for device sales, dropped to $214 million from $361 million a year ago.
Software and services revenue more than doubled to $154 million from $57 million a year ago, as BlackBerry shifts its primary focus to driving recurring subscriber fees from its business clients.
“BlackBerry has a solid financial foundation, and we are executing well,” Chen said in a statement before a conference call.
“To sustain our current direction, we are stepping up investments to drive continued software growth and the additional Priv launches. I anticipate this will result in sequential revenue growth in our software, hardware and messaging businesses in our software, hardware and messaging businesses in Q4.”
Chen has said previously that BlackBerry needs to sell five million phones in the current fiscal year to break even.
BlackBerry stock closed Thursday at US$7.80 on the Nasdaq market, which handles most of the BlackBerry trading volume, and at C$10.89 on the Toronto Stock Exchange.