in , ,

BlackBerry surprises investors with positive sales figures of its new smartphone

Thursday saw BlackBerry posting a surprising profit for the quarter, with the Canadian company saying it was able to ship about 1 million brand new BlackBerry Z10 phones. Despite the solid sales figure, some investors still do not think the company is out in the woods yet.

BlackBerry’s shares had been steadily climbing up to 2 percent throughout the week, although the shares jumped immediately to 10 percent in early trading following Thursday’s announcement. The positive trend does not  convince some investors that BlackBerry is now on track towards recovery as it still loses a significant number of subscribers during the same period.

Nonetheless, the surprise profit generating quarter for the besieged company has temporarily silenced the company’s critics. BlackBerry has seen its customer base gradually embracing the offers of rivals like Apple’s iPhones and Android-using smartphones.

Brian Colello, an analyst from Morningstar, said:  “I think the 1 million units is a nice start. 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 main star in BlackBerry’s apparent turn around this quarter is the company’s first touchscreen phone that features a new operating system. The Z10 was introduced a month before the quarter ended and had received positive reception in Canada and in some countries. It failed to make a splash in the U.S. market though.

Still, some analysts say that BlackBerry did not hit the projected target in revenue for the quarter, blaming the decreasing number of subscribers for the same period. BlackBerry’s fan base diminish from 79 million to 76 million within the three-month period. Critics point this out saying that this can significantly cloud the company’s long-term relevance in the smartphone market.

The Canada-based company also surprised investors by announcing that it will attain near break-even situation during the first quarter if it considers factors like lower cost base, improved hardware margins, and more efficient supply chain.

Still, the situation is not enough to hold back BlackBerry’s co-founder Mike Lazaridis to step down as vice chairman and director. He was the company’s co-chief executive until 2012.

Wall Street analysts on average believed that BlackBerry would lose 10 cents per share during the first quarter, said Thomson Reuters I/B/E/S.

If it excludes one-time items, BlackBerry reports a profit of 22 cents per share, while analysts expects a loss. The company said it was able to hit $98 million during the fourth quarter or 19 cents per share. It is an improvement over last year’s figure during the same period that showed a loss of $125 million, or 24 cents per share.

In spite of the favorable trend, BlackBerry is yet to show more improvements as its quarterly revenue dropped to $2.68 billion from $4.2 billion during the same period last year. Analysts expected that the company to hit $2.84 billion for the quarter.

To cap it off, something is always better than nothing for Blackberry. “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, the founder and managing partner of a firm called Ironfire Capital LLC which owns shares of BlackBerry.

source: reuters

Leave a Reply

Required fields are marked *

GameStop hit with low demand for games

Apple website occupies the 8th place in website popularity rankings