A drop in orders from BlackBerry's enterprise customers contributed to lower than expected sales in the company's software and services business. The Waterloo, Ontario-based company received 3,000 orders from enterprise customers in the first quarter, below the 3,500 orders received in the previous quarter.
As for the numbers, BlackBerry reported a Q1 profit of $671 million, or $1.23 a share, on revenue of $235 million, down from $400 million a year ago. Non-GAAP earnings were two cents per share.
Wall Street was looking for BlackBerry to post a loss of two cents per share on revenue of $265 million.
Despite the revenue miss, BlackBerry CEO John Chen touted the company's progress driving growth in strategic target markets, notably cybersecurity and enterprise IoT.
"We secured key design wins in high growth segments of automotive technology, including advanced driver assist, digital instrument cluster and our hypervisor solution," Chen said in a statement. "Our ecosystem is growing with Qualcomm and NVIDIA adopting BlackBerry technology for their automotive platforms. ... Our financial foundation is solid."
BlackBerry maintains its outlook for fiscal 2018, with Chen expecting "growth at or above the overall market in software and services."
BlackBerry's first quarter included a $940 million arbitration payment from semiconductor giant Qualcomm, which no doubt helped BlackBerry turn a Q1 profit.
BlackBerry and Qualcomm had agreed to arbitrate a contract dispute over whether the chipmaker's royalty cap program applied to payments made by BlackBerry under a licensing deal. The arbitrator determined that BlackBerry had indeed overpaid royalty fees between 2010 and 2015.
For the current quarter, analysts are expecting a loss of two cents a share on revenue of $248 million.