Software revenues propel BlackBerry to beat Q3 forecast
By Staff Writer
BlackBerry has posted a marginal loss of revenues in the third quarter ending November. But, the positive increase in revenues in the past two years brought cheer to investors. The stock rose 13 percent after the announcement of third quarter results.
The encouraging rise in software revenues offset the decline in revenues from legacy system access fees. The Ontario-based BlackBerry is optimistic on the continuation of a surge in revenues from software.
Reuters has reported that BlackBerry is expected to break even during the current quarter. However, the investments made in software and hardware could be complicated for the company to some extent. Company's Chief Executive John Chen forecasts profits for the company in 2017 fiscal beginning from 1 March 2016.
The revenues for the quarter fell 31 percent to $548 million on yearly basis, but rose 12 percent on quarterly basis. Analysts forecast a loss of $489 million or 14 cents a share.
BlackBerry has posted a loss of $89 million (£59.6 million) or 17 cents a share. BlackBerry's previous corresponding quarter recorded a loss of $148 million or 28 cents per share. The loss was further low if non-cash credit was excluded, as reported by Business Insider.
Banking on software, BlackBerry is hoping to turn around as it's pushing licensing its trove of patents. BlackBerry's handsets commanded the market and subsequently lost its market share with the emergence of consumer smartphone market.
Analysts say that BlackBerry's decision to invest in security and software was a right move. The sharp jump in software and patent licensing revenues propelled the company to record better than expected performance.
BlackBerry's stock rose 4.49 percent to $8.15 after the announcement of results, according to Investor Guide. The company positively surpassed the analysts forecast. The stock rose 11 percent after the news release.
BlackBerry's new Android-based device 'Priv' will be launched in over 30 countries during the current quarter. Based on the response to Priv, BlackBerry will plan on other Android phones.
Chen said: "If we can't make money, we're going to get out of the phone business and I mean hardware. We have tons of software that absolutely could run not only on Android phones but Apple and Windows phones too."
Banking on its software strength, BlackBerry strongly feels that it'll remain in phone business one way or the other. The company continues to making devices and licensing software and patents.
BlackBerry was originally known as Research In Motion Ltd. The Canadian major makes wireless and telecommunications equipment. It develops BlackBerry brand of smartphones and tablets.