BlackBerry (BBRY) Tops Q2 EPS by 5c; Will End Internal Hardware Development; Boosts FY17 Outlook
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BlackBerry (NASDAQ: BBRY) reported Q2 EPS of $0.00, $0.05 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $352 million versus the consensus estimate of $393.75 million.
The company will end internal hardware development. it will outsource hardware development to partners.
"We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold," said John Chen, Executive Chairman and CEO, BlackBerry. "In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company's history. We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system, and signed a strategic licensing agreement to drive global growth in our BBM consumer business."
"Our new Mobility Solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia. Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital," continued Chen.
"We remain on track to deliver 30 percent revenue growth in software and services for the full fiscal year. We are revising upward our non-GAAP EPS outlook to a range of breakeven to a five cent loss, compared to the current consensus of a 15 cent loss. This reflects increased confidence based on improving margins and reduced interest expense from the recent refinancing of our debt, as well as planned investments in growth areas."
The company lifted its FY17 adjusted EPS forecast to ($0.05) - $0.00. The Street is looking for ($0.15).
For earnings history and earnings-related data on BlackBerry (BBRY) click here.
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