BlackBerry Posts Surprise Fourth-Quarter Profit

BlackBerry posted a surprise profit in the fourth quarter, but saw a sharp drop-off in revenue as the once-iconic smartphone company said it reached the halfway mark of its turnaround effort.

The Canadian company earned $28 million, or 5 cents per share. Earnings, adjusted for non-recurring gains, came to 4 cents per share.

Wall Street expected a loss of 3 cents per share, according to a survey by Zacks Investment Research. The company had a loss last year of $148 million, or 28 cents a share.

But the company had revenue of only $660 million, a 33 percent drop compared with $976 million a year earlier. Wall Street was looking for $833.1 million this quarter.

BlackBerry is trying to turn its business around by reducing expenses while it attempts to transform itself into an enterprise software company. In the fourth quarter, it slashed expenses 61 percent to $424 million.

It was the second consecutive quarter that the company put up a surprise profit and shares rose more than three percent in early trading Friday morning. Chief executive John Chen said they are halfway through their two-year turnaround effort and said they will now focus on stabilizing revenue and achieving sustainable profitability sometime this year. Chen said the morale of the once-high flying company has improved.

"The company needs to financially be stable. I don't know of any way to improve the morale of a company, the people, if the company's not doing well," Chen said on a conference call with analysts. "I would say today the morale of the company's a lot better than a year ago. It probably still needs to be a lot better than today."

Chen noted that BlackBerry has $3.27 billion in cash and investments.

BGC analyst Colin Gillis said BlackBerry has successfully stopped the bleeding by preserving cash and getting expenses in line...

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