BlackBerry continues to lose money in Q4, falls short of Wall Street's expectations

The figures are nowhere near as high as earnings during its handset heyday, but CEO John Chen says BlackBerry is 'gaining traction' as a software and services company.
Written by Danny Palmer, Senior Writer

BlackBerry CEO John Chen says the firm is gaining traction in the enterprise software space.

Image: BlackBerry

BlackBerry is still losing money following the collapse in sales of its smartphones but reports progress in its reinvention as an enterprise software and services company.

BlackBerry posted revenues of $487m for the fourth quarter of the 2016 financial year, a decline of 30 percent year-on-year and some way below analyst's estimates of $566m. In total, the company posted a fourth-quarter loss of $238 million, or 45 cents a share.

CEO John Chen told an investors' call that the company had sold 600,000 phones during the quarter, again missing Wall Street's expectations that it would shift between 850,000 and the 700,000 units.

However, cash flow was up 113 percent for the 2016 financial year compared with 2015 and Chen claims the company is gaining traction in the enterprise software sector, where it will look to continue growth.

The Canadian firm, which is increasingly positioning itself as a mobile security software provider, also posted software and services revenue of $153m for Q4 of the most recent financial year, up 106 percent compared with the same quarter year-over-year.

The positive outlook has led to BlackBerry stating that it expects to grow its software and services division at around 30 percent. Currently, software and services brings in 32 percent of the company's revenue, while 29 percent is made up of service access fees and 39 percent coming from hardware and 'other revenue'.

"Overall, BlackBerry's Q4 performance was solid as we made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability, and generate positive free cash flow," said Chen.

"We have clearly gained traction and market share in enterprise software. We more than doubled our software and licensing revenue in Q4 and exceeded our target of $500 million for the full year," he continued, before going onto predict a bright future for the company.

"Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives".

BlackBerry has also partially benefited from its acquisition of Good Technology in September 2015, which is enabling customers to deploy Good Secure Enterprise Mobility Management Suites across a range of mobile devices, including those on Apple's iOS and Google's Android, expanding BlackBerry's reach across the mobile ecosystem.

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