BlackBerry cuts loss and sees rising sales

The company is now focusing more on software and services than on hardware as it works through a long turnaround.

On Friday BlackBerry reported a smaller quarterly loss which gave way to more motivation and here seemed to be some encouraging signals about its hard-pressed smartphone business as well as its software and services sales which is ultimately going to generate a 7 percent jump in its shares. The company has been one of the leading names in the smartphone industry however recently it had been pushed to its margins by the likes of Apple and Samsung. So it seems reasonable why the company would now be shifting its focus towards software and services than on hardware; it is currently working through a drawn-out turnaround.

As far as the services are concerned, the Canadian company has revealed a huge number of conversions into its heavily promoted new mobile device management platform in its second quarter. There was also some hopeful news from the hardware department of the company which showed an adjusted profit for the first time in five quarters which was brought on by lower manufacturing costs and strong demand for its low-end Z3 handsets in emerging markets.

The company also saw revenue growth from the previous quarter in North America however sales did decline in some other part and because of that the total revenue slithered down more than 40 percent from a year earlier. BGC Partners analyst Colin Gillis said “Broadly speaking, they’re doing the right things … but that revenue number is getting real small.” There was some boastful improvement in the shares of the company which were up 7.6 percent at C$11.70 on the Toronto Stock Exchange and up 7.4 percent at $10.51 on Nasdaq.

According to what the CEO, John Chen, has said revealed, 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. With the new turnaround plan, the CEO hopes to cut down on the costs and will sell certain assets and strengthen the company’s balance sheet. He said the company can stifle the revenue decline and they will see some growth around the beginning of the next year.

Things on the software side also hold a lot of hope for the company as John Chen has reported to the analysts that software revenues are likely to double by next year. This is going to follow the company’s move to convert to its mobile device management platform, BlackBerry Enterprise Service 10 (BES10).

The net loss for the second quarter that ended Aug. 30 has been reported by the company and it turned out to be $207 million, or 39 cents per share which is far less as compared to the year-earlier loss of $965 million, or $1.84 per share.

source: reuters