Blackberry was not able to land in the profitability region as it reported a loss of $28 million as against revenue of $658 million. In looking at the next three to five years, the long term earnings per share estimate growth rate for the company is 10.5%, based on 2 analysts providing projections. While CEO John Chen says BlackBerry will remain in hardware, his eyes are clearly set upon the more lucrative software side.
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Chen has maintained a target of reaching US$600 million in revenue from BlackBerry’s software sales business, which includes a premium version of its BBM services and other offerings angled towards business customers.
Unfortunately for BlackBerry, 40 percent of its revenue comes from the struggling hardware business.
Chen is a year and a half into remaking the ex- smartphone giant into a high-security software leader. And it also bought up United Kingdom startup, Movirtu, last September which builds software that allows multiple numbers to be active on a single device. During the quarter it completed its acquisition of WatchDox, a provider of secure enterprise file-sync-and-share technology.
Also on Tuesday, BlackBerry announced that it had signed a long-term patent cross-licensing agreement with IT behemoth Cisco.
Dr. Mark Kokes, vice president of intellectual property and licensing at BlackBerry, said: “Our agreement with Cisco underscores the value companies place on BlackBerry’s broad and foundational patent portfolio”.
Although these rumors have come and gone, Chen said he “would never turn down a transformational deal”, but it would have to be for the best price and in line with the company’s strategy. Let’s look to two important metrics to give us some idea as to whether BlackBerry is a good bet right now.
Further details on the agreement weren’t disclosed, which left some analysts concerned over whether BlackBerry was propping up its software division with revenues that will not last. Its most recent smartphone release was the BlackBerry Leap in April, with availability in 22 markets.
However, now things are majorly bleak on the BlackBerry font.
The software and licensing business is the only reason to own BlackBerry stock.
The software and service business of BlackBerry grew 150 percent, to $137 million, over the previous quarter. Nevertheless, it can be safely said that the company is on track to post a turnaround. The firm’s first quarter results have largely missed estimates but the result is not without some positive news for investors.
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