(December 21) The Canadian-based technology company Blackberry Ltd shares had one of their best days in months following better than expected financial results.
BlackBerry shares riseOn Wednesday, BlackBerry shares spiked 11.6 percent or $1.62 to close at $15.59The company announced an unexpected net profit and also revenue above the estimate of analysts.John Chen, executive chairman, claimed that the company was making good progress towards being a key software supplier for autonomous vehicles an area that he sees as a key growth opportunity for the company.The company once was known primarily for its smartphones which were very secure. The company is named after the BlackBerry phones. Originally the company with headquarters in Waterloo Ontario was known as Research in Motion (RIM).Blackberry is changing its product mixThe company is trying to reposition itself as a cybersecurity, software, and intellectual property supplier. It is working with many automotive industry's major chip makers and parts suppliers.Blackberry phones are now manufactured, designed and marketed by TCL Communication (Blackberry Mobile) for the global market. BB Merah Putin serves the Indonesian market and Optiemus the Indian market.The announcement that the company was no longer to produce its own BlackBerry phones was discussed in a September Digital Journal article.BlackBerry famous for its mobile phonesBlackBerry was formerly a key player in the smartphone market. It was well known for its security features. At its peak in September of 2013, BlackBerry had 85 million subscribers globally. However, BlackBerry was unable to keep pace with Android and Apple phones.By March 2016 subscriptions fell to 23 million. In the fourth quarter of 2016 only 207,900 BlackBerry phones were sold..The financial resultsBlackBerry has been experiencing financial difficulties for some time now. In the most recent quarter it lost $275 million. This includes a payout of $149 million after it lost an arbitration with Nokia.On a positive note, excluding the Nokia payout and other items the company had a profit of $16 million or three cents a share. This result was better than analysts had predicted. They thought that the adjusted earnings would break even.Revenue was higher than predicted as well on the quarter at $226 compared to an expected $214.6 million.Revenue from handheld devices continued to decline as the company change its emphasis. The revenue from this source dropped to just $9 million from $62 million. Revenue from system access fees also dropped to $27 million from $67 million.However, the revenue from software, services, and licensing rose to $190 million a record and up from $160 million last year.New developments at BlackBerryCEO Chen said about the company's work with many auto chip manufacturers and parts suppliers: "They have engaged us to provide them a BlackBerry operating system for the car that is high on safety and security." He noted that a modern car has more lines of code than an airplane.BlackBerry has developed about 12 different software modules beyond infotainment systems.As an example, the company has modules that guide lane changes with advanced driver assistance. It also has modules that connect the vehicle to wireless networks. It also shows how the various systems are functioning through virtual cockpit displays.Over time, the company's revenues should increase. Chen said: "Some of the design wins we had last year will turn into revenue in 2019 and the wins that we are having right now are going to turn into (revenue) in 2020.".Just last week, he company has announced a partnership with Denso Corp a Japanese-based company that is one of Toyota's technology suppliers. The two will develop an integrated platform for co-ordinating human-machine interfaces.The company now has 1,200 software sales people out in the field and a number of government agencies are renewing contracts for their software assuring the company of a revenue stream.CEO John Chen said: “We really do have a lot of people that want to do business with us,"
Previously published in Digital Journal