BlackBerry posted a surprise quarterly profit today and said it is pushing to end a slide in its revenue in this fiscal year.
"Our financial viability is no longer in question. We're now turning our attention to revenue stabilisation," CEO John Chen said on a conference call.
Chen plans to grow BlackBerry's small but high-margin software division by moving more customers onto its products, including proprietary technology that allows companies and government agencies to manage multiple employee devices.
The stock rose as high as US$9.77, before easing to US$9.59, up 3.1 percent on the Nasdaq, despite a much bigger-than-expected decline in fiscal fourth quarter revenue.
BlackBerry investors cheered the unexpected quarterly profit and solid growth in revenue from software products.
Chen said while the average analyst estimate of a small per-share loss in the current quarter looks reasonable "we do intend to do better."
"Chen and his team are one of the better management teams out there," BGC Partners analyst Colin Gillis said. "But they have a lot of selling and a lot of execution to do."
BlackBerry reported net profit of US$28 million, or 5 cents a share, in the fourth quarter ended February 28. That compared with a year-earlier loss of US$148 million, or 28 cents a share.
Excluding one-time items, quarterly profit was US$20 million, or 4 cents a share. Analysts, on average, looked for a loss of 4 cents a share.
Revenue, however, slid to US$660 million from US$793 million, well below estimates of US$786.4 million.
"BlackBerry continues to do a good job controlling operating expenses and eliminating its cash burn during its business transition, but the total revenue was still a big miss and we still have concerns about the demand side," Morningstar analyst Brian Colello said.
Software revenue rose 20 percent from a year earlier to US$67 million. Analysts closely watch the metric, given the transition from its traditional hardware- and services-driven model.
"It's an early good sign," Colello said. "They are looking for a more meaningful ramp in the middle of fiscal 2016, but certainly it's a good start."
BlackBerry reported positive cash flow of US$76 million in the quarter, and its cash position rose to US$3.27 billion in the fourth quarter, from US$3.1 billion in the third quarter.