BlackBerry Q1 Adjusted Earnings Top Expectations, Revenue Misses

BlackBerry Ltd BBRY announced a better than expected adjusted earnings for the first quarter. However, its top line continued to miss the Street analysts' expectations despite a year-over-year drop.

BlackBerry reported a net loss of $670 million or a loss of $1.28 a share in the first quarter compared to net earnings of $68 million in the year-ago quarter. On a per share basis, it incurred a loss of $0.10 in the first quarter of the previous year. On an adjusted basis, the smartphone maker would have earned $0.00 a share, which was better than the Street analysts' estimations for a loss of $0.08 a share.

The company's GAAP revenue was $400 million while non-GAAP revenue was $424 million, which was below the analysts' predictions of $470.94 million. Its software and services revenue reached $166 million and represented 39 percent of total revenue while mobility solutions accounted for 36 percent of revenue. Service Access Fees delivered 25 percent of the revenues.

BlackBerry closed the first quarter with cash and cash equivalents of $2.5 billion.

The company's Executive Chairman and CEO, John Chen, commented, "BlackBerry is differentiated by cross-platform market leadership in software, an end-to-end secure mobility platform and a strong financial foundation. Our Q1 results highlight these attributes. Excluding IP licensing, we have more than doubled our software revenue on a year-over-year basis for the second consecutive quarter, driven by our EMM, secure messaging and QNX embedded software businesses. In our Mobility Solutions business, our objective is to achieve operating profitability in the short term," said John Chen, Executive Chairman and CEO, BlackBerry."

He added, "Our current plan calls for continued investments to expand our addressable markets and drive sustainable profitability and revenue growth. For the full fiscal year, we are on track to deliver 30 percent revenue growth in software and services. Based on a more efficient operating model, we expect a non-GAAP EPS loss of around 15 cents, compared to the current consensus of a 33 cent loss. We also expect to generate positive free cash flow for the full year."

Going forward, the CEO expects maintaining a strong cash position and reallocating additional resources further to go-to-market, as well as, product development areas as it continued to execute on its tactics of positive adjusted EBITDA for the full 2017 fiscal year.