Tightfisted BlackBerry posts $28M profit in Q4, but software sales fail to impress

Struggling smartphone maker BlackBerry (NASDAQ:BBRY) surprised investors today by posting a fiscal fourth quarter net profit of $28 million. However, enthusiasm was dampened by fourth quarter revenues of $660 million, down from $976 million in fourth quarter 2014 and below analyst expectations of $786 million.

This is the company's second quarter in a row of posting a profit, but the profits are the result of extreme cost cutting and not necessarily of a take-up in sales. In fact, some analysts speculate that BlackBerry's revenue shortfall indicates that its new mobile-device-management software, launched in November, isn't gaining the necessary traction with customers. The firm's BES12 software promises to help companies manage employee devices--whether they are BlackBerrys, iPhones or Android-powered smartphones--on a corporate network.

BlackBerry's software sales did increase 20 percent over the previous year, to $67 million. In its last fiscal year, the company had $250 million in software revenue, but CEO John Chen has said the company aims to double that in its next fiscal year, a goal that many analysts are doubtful it will reach.

Although BlackBerry has been emphasizing its software sales, the company still derives the bulk of its sales from hardware. However, those sales are declining at a rapid clip. Research firm IDC recently reported that BlackBerry had just a 0.4 percent share of the global smartphone market in 2014, down from 1.9 percent in 2013.

BlackBerry said that, in its fiscal fourth quarter, it shipped 1.3 million smartphones and customers bought 1.6 million units at an average selling price of $211. Chen noted that 160 carriers in 86 countries are selling BlackBerry smartphones and that of the BlackBerrys that shipped, 90 percent were the newer-generation devices.

Earlier this month BlackBerry introduced a new touchscreen phone, the Leap, and the company has promised to release a new phone later this year with a dual-curved screen and slideout keyboard.

For more:
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- see this Reuters article
- see this CNET article

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