BlackBerry reported a small improvement in results for its fiscal first quarter to May, helped by its focus on cost reductions, cash flow and services. The company recorded a net profit of USD 23 million or 4 cents a share, versus a loss of USD 83 million a year ago. This include a one-time gain of USD 287 million from restating the fair value of debt and USD 226 million in pretax restructuring charges. Excluding these items, BlackBerry had a net loss of USD 60 million or 11 cents a share.
Revenues were still down sharply compared to a year ago to USD 966 million versus USD 3.071 billion. Compared to the February quarter, revenues fell by only USD 10 million, and the company actually increased the number of handsets on which revenue was booked, to 1.6 million from 1.3 million smartphones in the previous quarter. This followed the launch of the Z3 device in Indonesia, which Blackberry said it will launch in another eight countries.
Total handsets sold to end-customers, which includes those shipped in previous quarters, reached 2.2 million in Q1, as vendors cleared out inventories. Hardware made up only 39 percent of revenue in the quarter, while 54 percent came from services and 7 percent from software and other revenue. BlackBerry said it issued 1.2 million licences for BES10 thanks to its EZ Pass Program, of which over 10 percent were trade-ins from competitors' Mobile Device Management platforms. The higher share of services helped lift the gross margin to 46.7 percent from 33.9 a year earlier.
BlackBerry also reported a small increase in cash, to USD 3.1 billion from USD 2.7 billion at the end of February. Excluding a tax refund of USD 397 million and proceeds on the sale of real estate of USD 287 million, the company's cash burn was USD 255 million in the first quarter, down from USD 784 million on the previous quarter. Adjusted operating expenses were reduced by 13 percent sequentially and 57 percent year-over-year.
BlackBerry said it aims to maintain a strong cash position while "prudently" investing in growth opportunities. The group targets breakeven cash flow by the end of the fiscal year. "Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio," said CEO John Chen. "Looking forward, we are focusing on our growth plan to enable our return to profitability."
