BlackBerry (NASDAQ:BBRY) CEO John Chen told investors today that the company's Priv smartphone, which is based on Google's Android software, is a hit with consumers and will help the company turnaround its struggling hardware business.
"My first goal is to get us into a break-even position with the device business, because you really couldn't do anything strategically with a business that continues to lose money," Chen said during BlackBerry's fiscal third quarter earnings call, according to Re/code.net.
The company debuted the Priv in November and it is being sold exclusively in the U.S. through AT&T Mobility (NYSE: T) for $250 with a two-year contract or for 30 monthly payments of $24.67. The unlocked version of the phone retails for $699 and will work on T-Mobile US' (NYSE:TMUS) LTE network. The company also has deals with three major carriers in Canada to sell its device.
The company didn't provide any sales figures for the Priv. However, BlackBerry hopes to leverage the world's dominant operating system and its own expertise in security and privacy, and some analysts believe the company's future as a hardware manufacturer hinges on the device's success.
Chen also said that BlackBerry will expand distribution through carrier partners worldwide through 2016.
BlackBerry reported a net third-quarter loss of $89 million, marking a substantial improvement over the $148 million it saw during the same period a year earlier. It lost 3 cents a share adjusted to exclude items including pretax charges of $38 million in restructuring and acquisition costs and $18 million for amortization of intangibles.
The company also posted revenue of $548 million, down from $793 million a year ago but exceeding the $489 million expected by analysts. Analysts polled by Reuters also expected a loss of 14 cents a share. BlackBerry shares jumped this morning after posting quarterly results that beat expectations and showed growth of its software and sales business.
Perhaps most importantly, the revenue from its software and services business – which has become the focal point for the company that once ruled the mobile enterprise – came in at $162 million, more than doubling the $74 million it generated in the second quarter.
"We delivered accelerating growth in enterprise software and higher revenue across all of our areas of focus," Chen said. "BlackBerry has as solid financial foundation, and we are executing well. To sustain our current direction, we are stepping up investments to drive continued software growth and the additional Priv launches. I anticipate this will result in sequential revenue growth in our software, hardware and messaging businesses in Q4."
BlackBerry shares were up more than 8 percent in early-market trading following the announcement.
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