The ongoing recovery of BlackBerry (BB), the once-thriving smartphone maker, gained momentum in the second quarter when the technology company reported better-than-expected earnings aided by lower expenses. Following the earnings report, the company’s stock gained in premarket trading Friday.
The Waterloo-based company, which has been transitioning into software services, posted adjusted earnings of $0.04 per share for the second quarter, down from $0.05 per share a year earlier. Analysts had forecast a faster decline.
On a reported basis, BlackBerry posted net income of $43 million, compared to $19 million last year. On a per share basis, it posted a loss of $0.04 per share, marking an improvement from the $0.08 per share loss recorded in the second quarter of 2018. Revenues dropped 12% annually to $210 million during the August quarter.
“In the quarter, we exceeded our financial expectations driven by sequential growth in both our BlackBerry Technology Solutions and Enterprise Software and Services businesses,” said CEO John Chen.
Encouraged by the impressive results, the company reaffirmed its outlook for fiscal 2019, predicting double-digit growth in software and services billings. Full-year unadjusted earnings and cash flow are expected to be positive.
The company reaffirmed its outlook for fiscal 2019, predicting a double-digit growth in software and services billings
BlackBerry has been going through a crucial phase of its transition. Though the pace of changeover was encouraging in the recent quarters, when the software and services business accounted for about three-fourths of total revenues, investors were disappointed with the numbers.
Mobile security and enterprise software, which form a major part of BlackBerry’s new area of operation, is among the fastest-growing businesses worldwide. The company has found a place among the top vendors in all the segments it operates. Moreover, BlackBerry has improved its capital position significantly over the years, which provides for strategic investments going forward.
BlackBerry shares made noticeable gains at the beginning of the year after falling to a multi-year low, but retreated gradually and lost about 24% since then. The stock closed the last trading session lower, but gained notably in premarket trading Friday.
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