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June 19, 2014

BlackBerry Q1 Results Surprise Analysts

BlackBerry CEO John Chen

It may still be too early in the game to declare CEO John Chen’s comeback plans for BlackBerry a success but, for the first time in a number of months, the Canadian company surpassed analysts’ expectations.

The Waterloo, Ont. Smartphone maker recorded $966 million in revenue in its first quarter, up from analysts’ predictions of between $954 million and $963 million. BlackBerry also recorded a loss of 11 cents per share — significantly lower than the 26 cents per share predicted by Thomson Reuters.

The change in the company’s fortunes is not dues to sales, however — which have slipped further. Rather they are due to the cost-saving measures implemented by Chen.

“Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio,” Chen said. “Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement. Looking forward, we are focusing on our growth plan to enable our return to profitability.”

Chen, when he first took over the company last fall said its chances of survival were 50-50. But at Re/code’s Code Conference in Rancho Palos Verdes, Calif. a few weeks ago, he said BlackBerry has an 80 percent chance for success.

“I’m confident we will be able to save the patient,” he said, adding while BlackBerry has “problems,” it’s “not dead.”

Chen has reorganized the beleaguered firm since taking over from fired CEO Thorsten Heins.

Chen has put a new management team in place and has retuned the company to its core strengths of enterprise and security — abandoning the plan put in place by Heins to create snazzy touchscreen phones to compete with Apple’s iPhone and high-end Android options.

He said BlackBerry, during the tenure of Heins, became distracted by trying to produce the best higher-end Smartphones.

“We cast our nets a little too broadly,” he said. “The bigger play is in enterprise.”

With the next line of phones, BlackBerry is sticking to what it knows, although the devices will have larger screens, they will have the traditional full physical keyboard and all the of the popular messaging features. The devices are to be released around November, he said.

Chen also indicated he is willing to cut anything that is found to be holding the company back.

 


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Jennifer Cowan is the Managing Editor for SiteProNews.

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