BlackBerry Posts a Small Profit

A funny thing happened to BlackBerry as it reported on its recently ended fiscal quarter. It made a small profit. The net income -- $23 million -- was modest, but enough to surprise analysts tracking the firm, who expected another in the company's string of quarters showing losses.

The net income, the company said, excluded one-off restructuring charges. With those items, adjusted loss was $60 million. But even that is relatively good news, as the Canadian company posted a $423 million loss in the last quarter.

It wasn't all roses, however. Revenue dropped nearly 70 percent, to $966 million -- about $30 million higher than analysts' projections, but a decline nonetheless. About 39 percent of the revenue came from hardware, 54 percent from services, and 7 percent from software and other areas.

$3.1 Billion in Cash

Additionally, the company now has $3.1 billion in cash, compared to $2.7 billion in the last quarter. However, that increase is attributable to the sale of real estate and a tax refund.

Phone sales to wholesale channels reached 1.6 million handsets, compared to 1.3 million in the fourth quarter of the last fiscal cycle. However, BlackBerry saie that retailers and carriers actually sold about 2.6 million phones, drawing on existing inventory. By comparison, Apple sold more than 43 million iPhones in its last quarter.

Ross Rubin, principal analyst at industry research firm Reticle Research, told us that BlackBerry "continues to take the cost out of the business, [including] shifting its manufacturing to offshore production." Among other cost-cutting measures, BlackBerry has inked a five-year deal with Taiwan-based Foxconn to jointly develop and manufacture a number of its phones, and to help manage inventory.

The company reported it has adjusted operating expenses by a whopping 57 percent year-over-year, and 13 percent compared to the previous quarter. Rubin said that the...

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