BlackBerry’s comeback continues — sales and profits top forecasts

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Blackberry CEO: The smartphone market is saturated

BlackBerry’s transformation from struggling smartphone firm right into a burgeoning chief in cybersecurity software program and linked automobiles is on monitor.

The corporate now generates greater than 90% of its whole income from software program and companies. And 81% of these gross sales are recurring. In different phrases, BlackBerry is now not topic to the fickle tastes of customers and has hitched its wagon to company prospects.

BlackBerry (BB) reported earnings and gross sales Friday morning for its newest quarter that topped Wall Road’s forecasts. The inventory was up greater than 15% in late morning buying and selling on the information.

CEO John Chen, talking to CNN Friday, mentioned the corporate’s largest successes this quarter have been within the linked and autonomous automotive market, with income progress of about 30% for the enterprise unit that features the QNX software program enterprise for automobiles.

Chen mentioned BlackBerry is working exhausting to win extra prospects within the automotive market, pointing to a deal it introduced in January with Chinese language search engine large Baidu (BIDU) to collectively develop self-driving automobiles.

The corporate, beneath Chen, realized a number of years in the past that it was a shedding battle making units that generated razor-thin revenue margins at a time when Apple (AAPL) and Samsung (SSNLF) dominate the smartphone race.

That is why BlackBerry determined in 2016 to cease making its personal telephones and outsource the manufacturing of units with the BlackBerry title on them to different producers.

Since then, BlackBerry has gone all-in on software program.

BlackBerry hoping for a brand new ‘Spark’

So what’s subsequent? Chen mentioned he is hopeful that BlackBerry’s new Spark safety platform, which is form of like on the spot messaging on steroids, could make an even bigger presence within the well being care market. Spark integrates video chat, texts and different kinds media.

BlackBerry is concentrating on well being to assist the corporate develop past its core markets of transportation, governments and monetary companies firms.

Traders are happy with the turnaround too. BlackBerry’s inventory is up greater than 60% since Chen took over almost 5 years in the past. That is stable, but it surely has lagged the efficiency of Apple in addition to the Nasdaq.

Nonetheless, Chen has cleaned up BlackBerry’s steadiness sheet. The corporate now has $2.four billion in money and simply $740 million in long-term debt. Rumors about BlackBerry going out of enterprise are now not operating rampant the way in which they have been earlier than Chen joined.

BlackBerry’s board is pleased with Chen’s management as effectively. BlackBerry introduced in March that it was extending Chen’s contract by means of November 2023.

That will additionally put to relaxation among the rumors that Chen was solely going to stay round lengthy sufficient to promote BlackBerry to a bigger rival.

CNNMoney (New York) First printed September 28, 2018: 10:41 AM ET

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