BlackBerry Ltd. (NASDAQ:BBRY) reported fourth quarter profit that beat expectations for the sixth straight quarter. The company’s net loss fell to $47 million or 10 cents per share, from $238 million or 45 cents per share, a year earlier. On an adjusted basis, the company earned 4 cents per share while analysts had expected the company to break even.
Revenue fell nearly 38 percent to $286 million. On an adjusted basis, revenue was $297 million, higher than analysts’ average expectation of $289.3 million. Gross margin rose to 60.1 percent in the quarter from 43.3 percent the previous year. Operating expenses fell nearly 50 percent to $229 million.
The smartphone maker’s shift to the higher-margin software business appears to be paying off. BlackBerry surpassed its target of $640 million in software revenue for fiscal 2017. BlackBerry’s suite of security-focused software products includes a wide range of tools, including those that help companies track their employees’ mobile devices and computer operating systems for guided missiles.
BlackBerry expects to achieve margins of 70 percent for fiscal 2018. The company also expects to be profitable for the second year in a row, on an adjusted basis. The company said that it would generate positive free cash flow in the year ending February 2018.
The report sent shares soaring more than 15 percent. BlackBerry’s shares on the Nasdaq were up 16 percent in morning trading. This rise was the most in 15 months.
BlackBerry has scrapped production of its once-iconic smartphones to focus on building its software business. The company outsourced the development of new BlackBerry-branded devices to Indonesia’s BB Merah Putih last year. It also signed similar deals with India-based Optiemus Infracom Ltd. and China’s TCL. Those moves won’t see dividends until the products start selling later this year.
The Canadian firm also has a partnership with Ford Motor Co. to develop autonomous driving software. Earlier this week, Ford agreed to hire 400 of BlackBerry’s mobile tech experts to work on its connected cars. Chen hopes to make similar deals in the future with other carmakers around the world.