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    Monday, April 3, 2017

    Free From Phones, BlackBerry Posts Profit

    After three years of acquisitions, layoffs and trying to convince customers it could do more than build smartphones, the Canadian company’s software revenue and profit margins are growing in the way Chief Executive Officer John Chen wants them to. The stock too: It rose the most in 15 months. Bloomberg Intelligence's John Butler speaks on "Bloomberg Markets Canada."
    BlackBerry (TSX:BB) CEO John Chen says the company's latest financial quarter results met or exceeded expectations on key measurements - even though it posted another loss and lower revenue for the quarter and financial year ended February 28. Hedge funds and other institutional investors own 62.41% of the company's stock.
    The number of shares now held by investors is 529.96 Million. Norges Bank bought a new stake in shares of BlackBerry during the fourth quarter worth approximately $24,556,000. The stock has decreased 13 percent in the last 12 months. Staley Capital Advisers Inc. boosted its position in BlackBerry by 0.4% in the third quarter.
    A hedge fund recently raised its stake in BlackBerry stock. Blackberry has a 1-year high price of $8.46 and 1-year low price of $6.23. Let's also take a brief look at the stock price in relation to some highs/lows and moving averages.
    Also like eBay, BlackBerry has seen a revamped leadership team do a solid job of accepting industry realities, cutting costs and directing investments towards fields where the company has a chance of standing out in the face of intense competition. In most recent quarter, LT Debt/Equity ratio was listed at 0.29 and Total Debt/Equity ratio was noted at 0.00. BlackBerry had a negative return on equity of 3.62% and a negative net margin of 93.19%.

    When the company reports its next quarterly results, Chen said he expects to disclose how much the company made from royalties, which will include fees from the handset deals. Chen is already on the record stating that software/services revenue growth will slow, and it's already performing worse than he expected.
    BlackBerry then shed its phone-making business previous year by outsourcing everything device-related, such as phone designs, sales and production, to third-party companies.
    Shares of BlackBerry closed Thursday down 0.9% at $6.95, with a consensus analyst price target of $7.92 and a 52-week trading range of $6.23 to $8.46.

    In the fiscal fourth quarter, revenue was $297 million, beating the average estimate of $289 million. Software revenue was $182 million, 80 percent of which was recurring and not due to one-time licensing deals. BlackBerry’s cash balance increased, a key milestone after months of burning money, to $1.7 billion. The company also hired about 1,000 people last year even while reducing expenses, Chen said.
    “They’ve taken a lot of costs out of the business and are reinvesting those proceeds back in software, which is good to see,” Bloomberg Intelligence analyst Matthew Kanterman said. “Now that they’re going to keep investing in new products, they’ll be able to stay ahead, be able to prevent the latest threats, and ultimately in the longer-term, sustain even faster growth.”
    The battle isn’t over, and not every future quarter will be as positive as this one, Chen said. Still, the company has come a long way.
    “I don’t know how many companies are able to change dramatically from hardware to software,” he said. “Seeds planted are bearing fruit.”
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    Item Reviewed: Free From Phones, BlackBerry Posts Profit Rating: 5 Reviewed By: BrandIconImage
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