BlackBerry Ltd.’s revenue and adjusted earnings came in above analyst estimates in its fourth quarter, as all three of the company’s main software divisions showed growth.
The Waterloo, Ont.-based company, which reports in U.S. currency, had $233 million of revenue for the quarter ended Feb. 28. Its operating income was $19 million or five cents per share.
Analysts had estimated BlackBerry would have $216.4 million of revenue for the quarter and break even on an adjusted basis, with zero cents per share of operating income, according to Thomson Reuters data.
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John Chen, who is BlackBerry’s chief executive and executive chairman, said he was pleased with the company’s progress since it decided to stop manufacturing smartphones.
Chen noted that all three of its software divisions – focused on enterprise, intellectual property licensing and automotive markets – grew in the fourth quarter, both year-over-year and quarter-over-quarter.
“Our strategy is working,” Chen said. “This gives us confidence that we could capitalize on the significant market opportunities available today as well as in the future.”
The current opportunities include enterprise software and services that provide governments and regulated industries, such as banking, the tools to provide secure communication for their employees, partners and customers.
“The heritage of BlackBerry gives us the right to play in this area, both from a know-how and a reputational point of view,” Chen said in an interview.
He said there’s an opportunity to “upsell” to current enterprise customers with products and services such as the BlackBerry Bridge, announced last week, which is designed to provide heightened security to all Microsoft Office applications used by an organization’s workforce, suppliers and business partners.
The Bridge product is currently in final customer trials prior to general availability.
Besides its traditional vertical market segments, BlackBerry is also seeing expanded opportunities within the hospital, pharmaceutical and energy vertical markets. It’s also building its presence in China, Korea, and Japan, he said.
For Chen, BlackBerry’s future includes opportunities for securely connected devices, as its Radar hardware and service for the trucking industry, and for QNX software embedded in connected and autonomous vehicles.
BlackBerry is primarily a software component supplier to Tier 1 automotive suppliers, including Canada’s Magna International, but it’s also working with Ford and, more recently Jaguar Land Rover, as they develop their vehicles.
Chen said that he’s heard, anecdotally, that the introduction of commercially available autonomous vehicles might come later than 2021, a publicly stated goal of BMW and Honda.
“An awful lot of things have to happen between now and then to make that happen including, but not limited to, government policy on safety standards,” Chen said.
He said he’s heard people “in the know” mention the year 2025 more often recently at cocktail parties but described that as hearsay that would make a lot of sense.
Last week’s pedestrian fatality during a test of a Uber self-driving vehicle in a Phoenix suburb has sent shock waves through the industry and caused the ride-sharing company to suspend its on-road testing program, including in Toronto.
Chen said BlackBerry isn’t a supplier to Uber or to Google’s Waymo automotive division but QNX continues to conduct off-road trials of its software, including a test-track run that’s expected soon in Toronto.
Earlier Wednesday, BlackBerry announced a net loss of $10 million or six cents per share under U.S. generally accepted accounting compared with a loss of $47 million a year ago. Analysts had estimated a net loss of eight cents per share.
BlackBerry’s shares were little changed Thursday morning, trading at about $16. That’s up nearly 70 per cent over the past year.
Two weeks ago, the company announced a five-year contract extension for Chen, who has been executive chairman and chief executive since joining the company in November 2013 with a mandate to turn it around.
Chen’s new contract, which runs to November 2023, is weighted toward long-term performance-based equity and cash awards, in addition to a time-based equity award. His base salary, short-term cash incentive and benefits won’t change.
