BlackBerry posts surprise profit, but subscriber base down - Economic Times

TORONTO: BlackBerry reported a surprise quarterly profit on Thursday after shipping 1 million new Z10 smartphones, but the Canadian company still fell short of convincing markets that its turnaround plan is already a runaway success. BlackBerry shares were up 2.3 percent at midday on the Nasdaq, down from their 10 percent gain immediately after the results came out. Expressing lingering doubts, some analysts focused on a decline in the company's subscriber base, a potential threat to its long-term growth prospects and turnaround plans. Others, however, zeroed in on strong sales of the new touchscreen Z10 device, which BlackBerry start ed rolling out at the end of January. "I think the one million units is a nice start," said Morningstar analyst Brian Colello. "I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability." The well-reviewed Z10 smartphone is the first in a line of devices that will be powered by the new BlackBerry 10 operating system. It is a key plank in the company's attempt to regain relevance and win back market share in the smartphone arena it once dominated. In a positive sign, BlackBerry said roughly 55 percent of the buyers of the Z10 were coming from other platforms - news that should allay fears that BlackBerry would be unable to attract users who have never used one of the company's devices, or who have abandoned BlackBerry in favor of Apple's iPhone and smartphones using Google's Android s oftware, or other platforms. The results offered solace to both bulls and bears on BlackBerry, which virtually invented on-your-hip email before ceding ground to rivals. Some analysts noted that the company's quarterly revenue missed expectations and fretted about the decline in subscriber numbers to 76 million from 79 million during the fourth quarter. But others focused on the unexpected profit and on the Z10 sales. The stock was up 2.3 percent at $14.89 on Nasdaq. Its Toronto-listed shares were 2 percent higher at C$15.10 at 1230 EDT (1630 GMT). The stock was the most actively traded issue on the Nasdaq on volume of more than 65 million shares. "All in all, I'm happy because I think the majority seemed to be expecting the world to cave in on them, and that did not happen," said Eric Jackson, founder and managing partner of Ironfire Capital LLC, which owns BlackBerry shares. BREAK-EVEN FORECAST BlackBerry said its fiscal fourth-quarter net income was $98 million, or 19 cents a share, compared with a year-earlier loss of $125 million, or 24 cents a share. The swing to profit largely reflected a provision for income tax recoveries. Excluding one-time items, the company reported a profit of 22 cents a share. Analysts had expected a loss. BlackBerry surprised some investors by saying it believes it will approach break-even in its first quarter, based on a lower cost base, a more efficient supply chain and improved hardware margins. BlackBerry said it sold about 1 million of the new Z10 device in the quarter, and shipped roughly 6 million smartphones. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEvGWcYoPDIff-_yX03TcSJRUtPBA&url=http://economictimes.indiatimes.com/tech/hardware/blackberry-posts-surprise-profit-but-subscriber-base-down/articleshow/19258146.cms

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