BlackBerry posts a surprise profit
BlackBerry’s (BBRY) fiscal 3Q17 results portrayed a company on the verge of a successful turnaround. Although revenue for the quarter fell to $289 million from $548 million in the comparable quarter a year earlier, adjusted EPS (earnings per share) profit of $0.02 improved from adjusted EPS loss of $0.03 a year earlier and topped the consensus estimate for adjusted EPS loss of $0.01.
Software business to grow 30%
The fiscal 3Q17 results further revealed that BlackBerry’s focus on software and services is paying off. The company reported software and services revenue of $160 million in the quarter, up 16% over the prior quarter. BlackBerry now expects its software business to grow 30% in fiscal 2017. The company also raised its profit outlook for fiscal 2017 and now expects adjusted EPS profit for the full year compared to the earlier guidance that called for the bottom line in the range of breakeven to a loss of $0.05 a share.
Driverless car technology
BlackBerry is expanding its software scope beyond smartphones to self-driving vehicles. The company is in the process of hiring ~600 engineers who will dedicate their efforts to building driverless car technologies. This move comes at a time when Ford (F), General Motors (GM), Tesla (TSLA), Alphabet (GOOGL), and Uber have stepped up their autonomous vehicle programs.
BlackBerry ditched its hardware business to allow it to focus its resources and attention on the profitable software and services business. The company had lost market share in the smartphone business to Apple (AAPL) and Samsung (SSNLF) before it decided to ditch the business.