Blackberry beats earnings and revenue estimates
Blackberry (BBRY) was once a stalwart in the hardware industry. However, the arrival of smartphones hit the company’s handset shipments hard, and it stopped making handsets last year. However, the Canadian company is now making a comeback as a software company.
Blackberry released its fiscal 2Q18 (quarter ended August 31, 2017) earnings on Thursday, September 28. The company generated revenue of $249 million in the quarter, much higher than Wall Street’s expectations of $220 million. Blackberry’s net income came in at $19 million, or $0.05 per share, in fiscal 2Q18, while analysts were expecting it to break even.
Blackberry’s software revenue saw robust growth
While Blackberry’s revenue is much lower than the $352 million it generated in the same quarter last year, it’s higher than the $244 million it made in fiscal 1Q18. The company’s software revenue for fiscal 2Q18 was $196 million, 26% higher than its fiscal 2Q17 revenue. The company’s gross margins expanded from 62% in fiscal 2Q17 to 76% in 2Q18.
The company’s current CEO, John Chen, took over in 2013, when competition from the likes of Apple (AAPL) and Samsung (SSNLF), was killing Blackberry’s market share. Chen used the company’s cash on hand to make strategic acquisitions, which has helped the company redefine itself as a software company. It is now mainly into licensing and the enterprise software business. Blackberry stock rose almost 14% on Thursday, and has risen ~50% year-to-date.