BlackBerry Z10 helps company post surprise quarterly profit

BlackBerry Z10 helps company post surprise quarterly profit

Helped by recently-launched BlackBerry 10 smartphones, handset maker BlackBerry today reported a surprise profit of USD 98 million for the fourth quarter ended March 2, 2013, even as revenue dropped.

The struggling smartphone maker said it shipped "6 million smartphones, including approximately 1 million BlackBerry Z10 units" during the fourth quarter.

The Nasdaq-listed company had posted losses in the previous three quarters of the 2013 fiscal while for the same period last year, it had reported a loss of USD 125 million.

BlackBerry shipped about 370,000 PlayBook tablets during the quarter, it said in a release.

"Revenue for the fourth quarter of fiscal 2013 was approximately USD 2.7 billion, down 36 per cent from USD 4.2 billion in the same quarter of fiscal 2012," it said.

To revamp its flagging sales and take on rivals Apple and Samsung, the Waterloo, Ontario, based company last month launched its latest software BB10 offering more applications for users.

It also re-christened itself as 'BlackBerry' from Research in Motion (RIM) in January this year.

BlackBerry has a subscriber base of around 76 million by the end of fourth quarter, the company said.

For the 2013 fiscal, BlackBerry's revenues stood at USD 11.1 billion, down 40 per cent from USD 18.4 billion in fiscal 2012.

The company, however, reported a net loss of USD 646 million for 2013 fiscal, against a net profit of USD 1.2 billion in the previous financial year.

On the outlook, it said "The company will be increasing its marketing investment in the first quarter of fiscal 2014 in support of the global launch of BlackBerry 10." 

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This also includes the anticipated 50 per cent sequential increase in marketing spending, it added.

"... the company believes it will approach break even financial results in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins," it said.

The company also announced that its co-founder Mike Lazaridis has decided to retire as Vice Chairman and Director of the company.

"Lazaridis co-founded BlackBerry nearly 30 years ago and served as a co-CEO of the company until last year when he was elected Vice Chair of the Board. Lazaridis will step down from the BlackBerry Board effective May 1, 2013," it said.

BlackBerry posts surprise profit, but subscriber base down

TORONTO: (Reuters) BlackBerry reported a surprise quarterly profit on Thursday and said it shipped 1 million of its all-new Z10 smartphones in the period, but the company has yet to convince some investors that its turnaround plan is succeeding.

The Canadian smartphone maker's shares were up nearly 2 percent in early trading, but had jumped of more than 10 percent immediately after the results came out. Some investors focused on a decline in the company's subscriber base, a possible threat to its long-term growth prospects.

Still, the results offered solace to both bulls and bears on BlackBerry, which virtually invented on-your-hip email, but has lost market share to iPhone maker Apple and smartphones using Google Inc's Android software.

"I think the 1 million units is a nice start," said Morningstar analyst Brian Colello. "I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability 

The touchscreen Z10, which uses an all-new operating system, is key to BlackBerry's revival. Its introduction a month before the end of the quarter received a warm reception in Canada and a few other countries, but the initial U.S. launch, just last week, was muted.

Some analysts said revenue missed expectations and that the decline in subscriber numbers to 76 million from 79 million during the fourth quarter ended March 2 clouded BlackBerry's long-term turnaround prospects.

The stock was up 1.9 percent at $14.83 in early trading on Nasdaq.

BREAK-EVEN FORECAST

BlackBerry said Mike Lazaridis, who co-founded BlackBerry nearly 30 years ago, would step down as vice chairman and director. Lazaridis was co-chief executive officer until last year.

The company also surprised investors by saying it believes it will approach break-even financial results in its first quarter, based on a lower cost base, more efficient supply chain and improved hardware margins.

Analysts on average had expected a loss of 10 cents a share in the first quarter, according to Thomson Reuters I/B/E/S.

BlackBerry said net income in the fourth quarter was $98 million, or 19 cents a share, compared with a year-earlier loss of $125 million, or 24 cents a share.

Excluding one-time items, the company reported a profit of 22 cents a share. Analysts had expected a loss.

Yet the company is not out of the woods. Quarterly revenue fell to $2.68 billion from $4.2 billion a year earlier, below analysts' estimates of $2.84 billion.

"All in all, I'm happy because I think the majority seemed to be expecting the world to cave in on them, and that did not happen," said Eric Jackson, founder and managing partner of Ironfire Capital LLC, which owns BlackBerry shares