BlackBerry posts modest $28m profit despite revenues halving to $3.3bn

BlackBerry has posted a small profit for Q4 2015 despite revenues for the year halving

BlackBerry has posted a modest profit of $28m for the fourth quarter of its 2015 fiscal year, despite revenues for the 12-month period halving.

The company posted revenues of $660m, a decrease of almost a third on Q4 2014 when the figure was $976m.

Despite this, BlackBerry was able to post a small profit compared with a loss of $423m for Q4 last year. Overall for fiscal 2015, BlackBerry posted a loss of $304m. This was far lower than the staggering $5.9bn loss in fiscal 2014.

The breakdown of revenue for the quarter was 42 percent hardware, 47 percent services and 10 percent software.

Some 1.6 million BlackBerry smartphones were sold in the quarter to end customers, at an average selling price of $211 compared with $180 in the previous quarter.

BlackBerry CEO John Chen touted the figures as proof that the firm’s attempt to reinvent itself is paying dividends and that it is well placed for the next financial year.

“Our focus this past year was on getting our financial house in order while creating a multi-year growth strategy and investing in our product portfolio. We now have a very good handle on our margins, and our product roadmaps have been well received,” he said.

“The second half of our turnaround focuses on stabilisation of revenue with sustainable profitability and cash generation.”

BlackBerry shares rose slightly when the results hit the market as investors clearly saw positive signs in Chen’s strategy and the firm’s future.

Despite the modest profit, Gartner vice president and distinguished analyst Ken Dulaney said that there are still concerns about the long-term direction of the company given that hardware still makes up the bulk of its revenues.

“BlackBerry revenue remains dominated by hardware, both device sales and licensing revenues that come from the older BlackBerrys,” he told V3.

“To succeed in hardware you must sell millions of devices to consumers. I don’t think this is going to be a fertile area for BlackBerry any time soon.”

Dulaney also noted that, while Chen has said that the future for BlackBerry lies in software, only 10 percent of its revenues came from this segment in Q4, suggesting that the evolution will not be easy.

“Transitioning from a $3bn hardware software combo to a $1bn software company is difficult while in the spotlight of Wall Street,” he said.

“It would be nice if they could go private or split the company, but I don’t think Chen has the financing options to pull this off right now.”

The figures come just a week after BlackBerry announced that its Secusmart subsidiary has teamed up with IBM to deliver a high-security tablet device for public sector markets and enterprises.

This followed an expansion of the BlackBerry 10 range with a new handset called BlackBerry Leap that has a 5in HD touchscreen and 4G LTE network support. The Leap was shown off at Mobile World Congress.

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27 March 2015 | 3:43 pm – Source: v3.co.uk

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