BlackBerry posts small profit as focus shifts to security software

BlackBerry's big bet on software and services is making progress -- albeit slowly.
Written by Zack Whittaker, Contributor

BlackBerry's big bet on software and services is making progress -- albeit slowly.

The Canadian former phone maker turned software developer posted Tuesday a fiscal third-quarter profit of just one cent for the quarter, beating Wall Street expectations, which predicted a two cent loss (statement).


No longer a smartphone company, BlackBerry is investing in software and services. Read more.

However, the company missed on revenue, bringing in $301 million versus expectations of $332 million.

It's a mixed bag, but a lot better than what the company was expecting.

BlackBerry's stock rose by more than 2 percent on the news in pre-market trading.

BlackBerry earlier this year said it would transition away from selling handsets and would transform into a software and services company, providing specialist security and device management products to enterprise customers.

But despite its small profit for the quarter, the company didn't see a balancing of divisions. Its software and services unit still has a way to go before it can match its former smartphone unit.

Its declining smartphone unit made up 23 percent of the company's revenues, or $62 million down from $220 million a year earlier, with its replacement software and services taking in 55 percent, or $160 million.

John Chen, the company's chief executive, was nevertheless upbeat on the news.

"We achieved significant milestones in Q3, delivering the highest gross margin in the company's history for the second consecutive quarter and continuing to transform our infrastructure and operations to support an enterprise software business. These accomplishments drove operating profitability in all business segments and overall positive non-GAAP EPS," he said.

The company raised its outlook to a projection of breaking even, give or take a few cents.

Wall Street was looking for a loss of five cents for the year on revenue of $1.42 billion.

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