BlackBerry’s Revenue is Still Down, But New CEO Has Plans to Change That
BlackBerry still reported a quarterly loss on Friday, but it was smaller than many expected, which shows that the business of the Canadian company is slowly recovering. Let’s have a look at some more details.
BlackBerry has recently announced the flagship BlackBerry Passport smartphones which comes with impressive feature, despite its unusual design. Quickly after that, the company has announced its financial results of the second quarter fiscal 2015.
The company’s smartphone as well as software and services business has proved to fare quite well, managing to gain an increase of more than 4% in its shares. There’s a huge ongoing pressure from Apple and Google, as well as Microsoft with Windows Phone, so BlackBerry faces a tough challenge.
By the looks of it, under the helm of the new CEO John CEO, the company is now focusing more on software and services than on hardware; and it seems that this is benefiting the company.
The new device management platform has seen a big increase in users and BlackBerry’s hardware unit has been ‘saved’ by strong demand for its low-end Z3 handsets in emerging markets. CEO John Chen said the following:
“This is the first time in a long time that we have actually made money on hardware. We think we can continue on that track, so hardware is no longer going to be a drag to the margin and the earnings.”
He also says that the company plans to unveil new smartphones at the upcoming Mobile World Congress 2015 popular tech show in Barcelona, Spain. We will be there and will let you know about all the most important releases.
BGC Partners analyst Colin Gillis also added the following:
“They’re taking all the right steps, which is great. It’s encouraging to see. Now we’ve got to see what Chen can do about the revenue decline.”
All in all, BlackBerry is on for a good start, as its shares have slightly went up despite declining revenue. Chen said the company has already taken 200,000 orders for its new squared-screened Passport smartphone, which went on sale on Wednesday and sold out on Amazon.com within six hours.
BlackBerry will also release a second generation Passport device at some point in the future, but hasn’t hinted towards a release date. The CEO says that he expects software revenue to double next year from around $250 million in the current fiscal year mainly thanks to its device management platform -BlackBerry Enterprise Service 10.
Morningstar analyst Brian Colello added the following:
“We’re encouraged by the company’s growth in enterprise software licensees and aggressive cost-cutting measures,”
During the latest earnings call, BlackBerry reported a net loss of $207 million, or 39 cents per share, for its second quarter ended August 30. Compare that to last year’s huge loss of $965 million, or $1.84 per share. Revenue was $916 million, versus $1.57 billion a year earlier.