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BlackBerry posts second straight earnings gain

Matt Hamblen | March 30, 2015
BlackBerry's turnaround continues, as the company reported a second straight quarter of profit on Friday, along with expectations of sustained profitability throughout the coming year.

The reason, Dulaney said, is that business customers have already installed alternative mobile device management (MDM) software and are happy with the result. "They don't see changing their hardware and MDM vendor to BlackBerry as a strategic move and they have other priorities," he said.

A lot of ground was lost by BlackBerry before Chen arrived there in November 2013, Dulaney said. "John Chen is a good manager and doing his best, but the hole they are in is a deep one created by his predecessors," Dulaney said. "His track record on turnarounds is good, so we'll see."

Analysts had expected BlackBerry to report a small quarterly earnings loss of up to 4 cents on Friday, so the earnings gain shows how BlackBerry can surprise the market.

To that point, Chen said he has seen analyst estimates of upcoming earnings losses of from 8 cents to 13 cents per share, which he admitted could be "somewhat reasonable," he said, "you can be sure we intend to do better."

While he has worked toward completing a corporate restructuring affecting BlackBerry workers, he added that the best way to improve morale and productivity is by stabilizing the company financials. "Today, the morale of the company is a lot better than a year ago and probably still needs to be a lot better than it is today," he said. "I'm comfortable with our productivity, but it would be nice to have more money to spend."

Chen summarized the call with three takeaways: "Number one, I hope you'll agree with me that our financial house is order... Second, we are seeing traction with devices and they are quite well received by carriers. Third, with software momentum, we do have to make investments, both with products and distribution...

"We're a little ahead of our turnaround milestone, but only half-way through [to] stabilizing revenue. Transitions like this are never easy and smooth."

 

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