Ostensibly, BlackBerry’s fortunes may be coming up roses due to CEO John Chen’s cost-cutting efforts, transition to enterprise security software and consumer services to professionals in healthcare, finance and business.
According to the recent third-quarter reporting results, the company experienced a net loss of $148 million, which is 28 cents a share. The company reported revenues of about $793 million, down 34 percent from the same time a year ago. This was below analysts’ expectations of roughly $932 million.
Chen has accomplished much of his schemes in the past year. For instance, he has been successful in outsourcing the manufacturing of smartphones in order to prevent an overload in inventory. Also, every cost-cutting milestone has been met on schedule. So far, new security software and devices have been delivered on time. BlackBerry sold approximately two million phones to its distribution channels in the previous quarter.
We reported Thursday that BlackBerry is bringing back “The Classic” smartphone that business professionals first fell in love with a few years ago. Many experts questioned the move because of its keyboard feature, a function that smartphones have abandoned as everything is now touchscreen.
During the announcement of “The Classic,” Chen noted that this revitalization of this smartphone is geared towards professionals, but it also wishes to bring in youth that have never owned a BlackBerry before.
The BlackBerry head told investors in a press release that their work isn’t yet finished. “We achieved a key milestone in our eight quarter plan with positive cash flow,” Chen said in a statement. “Our focus now turns to expanding our distribution and driving revenue growth.”
BlackBerry, headquartered in Waterloo, Ontario, announced Friday that it has completed the purchase of Secusmart, a private company that specializes in voice and data encryption. It made the decision this past summer to acquire the German-based company as its primary clientele consists of high-level government officials.
German Chancellor Angela Merkel now owns a BlackBerry with Secusmart encryption. Canadian officials also have the security technology produced by Secusmart.
“The acquisition of Secusmart underscores BlackBerry’s long-standing commitment to being the best in enterprise mobile security,” Chen said in a separate statement. “BlackBerry is the only vendor to offer secure and encrypted voice, text and messaging, setting us further apart from others in the industry.”
During the pre-market trading, BlackBerry shares tumbled 4.4 percent at $9.63.
Analysts say that just because the stock is down it shouldn’t mean that traders should dismiss the company’s positive achievements and potential.
“You’re able to turn a profit, you’re able to generate cash on a much lower revenue number this quarter, what’s going to happen when your revenue number goes up next quarter?” said Colin Gillis, an analyst with BGC Partners in New York, in an interview with Bloomberg News.
