The Canadian company has managed not only to sell one million Z10s since unveiling the new Smartphone Jan. 30, BlackBerry also reported today it is back in the black, much to Wall Street’s surprise.
In the fourth quarter of fiscal 2013, BlackBerry earned $98 million, or 19 cents a share, compared with a loss of $125 million, or 24 cents a share, in the same quarter the previous year. Adjusted income from continuing operations for the fourth quarter was $114 million, or $0.22 per share.
The report is significantly better than what analysts surveyed by FactSet had been predicting: a loss of 31 cents per share.
Revenue was approximately $2.7 billion, down 36 percent from $4.2 billion in the same quarter of fiscal 2012.
The better than expected report is being attributed to the firm’s new BlackBerry 10 system, which has widely been seen as vital to the firm’s future.
The Z10, BlackBerry’s touchscreen device, has been selling well internationally and in Canada since its debut. U.S. sales were not included in the fiscal fourth quarter’s financial results because the Z10 just went on sale there last week.
“We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the company returning to profitability in the fourth quarter,” said president and CEO Thorsten Heins in a statement. “With the launch of BlackBerry 10, we have introduced the newest and what we believe to be the most innovative mobile computing platform in the market today. Customers love the device and the user experience, and our teams and partners are now focused on getting those devices into the hands of BlackBerry consumer and enterprise customers.”
In a conference call today, Heins said 55 percent of the Z10’s sales are due to customers switching brands, although he did not say from which platforms the customers were coming.
“As we go into our new fiscal year, we are excited with the opportunities for the BlackBerry 10 platform, and the commitments we are seeing from our global developers and partners,” Heins added. “We are also excited about the new, dynamic culture at BlackBerry, where we are laser focused on continuing to drive efficiency and improve the company’s profitability while driving innovation. We have built an engine that is able to drive improved financial performance at lower volumes, which should allow us to generate additional benefits from higher volumes in the future.”
It was not all good news today, however. BlackBerry also revealed it has slipped by an additional three million subscribers to 76 million in the quarter.
Jack Gold of J Gold Associates said while the loss of subscribers is “troubling” the new devices have not been in play long enough “to stem the loses.”
“It’s very early on in the re-building of the brand and the new devices, but they seem to be off to a reasonable start,” Gold said in an e-mail. “They seem to have effectively slowed down the bleeding to a trickle, while also increasing the cash they have on hand and increased margins. One of the key devices for their future, the Q10 isn’t out (in the U.S.) yet, so I expect that device will appeal much more to the traditionalist BB users and should have an uptick for them in sales.”
“The bottom, bottom line is, BB is certainly not dead yet and I think it’s a mistake to count them out yet, even though they still face some significant hurdles to overcome.”
The BlackBerry 10 has been billed as the beleaguered Waterloo, Ont. company’s last chance at redemption. BlackBerry’s devices dominated the market at one time, but have since fallen victim to Apple’s iPhone and devices powered by Google’s Android operating system. With a net loss of $235 million in the last quarter, the firm desperately needs its new Smartphones to be a success.
If the Z10’s current momentum continues, however, BlackBerry may even close in on its ultimate goal of securing the No. 3 Smartphone maker slot behind Samsung and Apple.