BlackBerry notches 200K Passport orders, but continues to struggle financially

BlackBerry (NASDAQ:BBRY) said it has received 200,000 orders for its new Passport smartphone, the first major smartphone release from the company since 2013. BlackBerry CEO John Chen said the new phone, announced earlier this week, sold out in six hours on BlackBerry's website and in 10 hours on Amazon's site. He said the company has now sold enough Passport smartphones to make the device profitable, according to Bloomberg.

News of BlackBerry's Passport progress came as part of the release of the company's fiscal second quarter financial results. The company posted a net loss of $207 million during the period, notably smaller than the $965 million net loss it recorded during the same period a year ago. However, the company's quarterly revenue fell more than 40 percent year-over-year to around $916 million, below Wall Street expectations of $950 million.

Nonetheless, the company continues to target break-even cash flow financials by the end of this year. "Our workforce restructuring is now complete, and we are focusing on revenue growth with judicious investments to further our leadership position in enterprise mobility and security, driving us towards non-GAAP profitability during FY16," Chen said in a statement.

After the disastrous launch last year of its new BlackBerry 10 smartphone operating system and devices, BlackBerry's board hired on Chen to oversee a corporate pivot away from the mass market for smartphones and toward a focus on enterprise users, along with a significant cost-cutting effort. The Passport, which features a square design and a Qwerty keyboard, highlights that effort since BlackBerry is targeting the gadget directly at corporate and business users. AT&T Mobility (NYSE: T) has said it will sell the device, though it hasn't yet announced a price. BlackBerry said the phone will go for $599 without carrier subsidies.

As for BlackBerry's overall quarterly device sales, the company said it recognized hardware revenue on approximately 2.1 million BlackBerry smartphone units, and that during the quarter it recorded the sale of 2.4 million BlackBerry smartphones to end customers. The company said sales of its older BB7 devices helped boost its financials in North America.

According to the WSJ, Chen said he expects revenues from BlackBerry's software business to double by next year, which he said will help offset declines in its service revenue. He added that BBM, the company's mobile messaging service, should account for about $100 million in revenue next year.

According to Reuters, BlackBerry is hoping to spark interest in its mobile device management offering with the November release of its new BlackBerry Enterprise Service 12 (BES12). The product allows companies, government agencies and others to manage and secure BlackBerry devices alongside iOS, Android and Windows smartphones. BlackBerry said it had issued 3.4 million licenses for its current BES10 platform in its most recent quarter, an increase from the previous quarter. Importantly, the company said 25 percent of its new BES customers came from rival mobile device management products.

For more:
- see this BlackBerry earnings release (PDF)
- see this WSJ article
- see this Bloomberg article
- see this Reuters article
- see this CNET article

Related Articles:
BlackBerry launches new Passport smartphone through AT&T, hopes to win back enterprise customers
BlackBerry exec: I'd 'love' to have BBM running on a wearable
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Rumor Mill: BlackBerry to target 4 different market segments with new smartphones
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