BlackBerry share price soars, narrowing Q2 loss beats projections

BlackBerry reported on Friday that its second-quarter loss narrowed further to top analysts initial estimates, but falling revenue suggested the company is not out of the woods yet.

According to BlackBerrys statement, non-GAAP net loss for the three months ended August 30th shrunk to $11 million, or 2 cents per share, beating analysts projections for 16 cents per share. GAAP net-loss, which includes one-time items, narrowed to $207 million, or 39 cents per share, from $965 million, or $1.84 per share, during the comparable period a year earlier.

BlackBerry used $36 million of cash over the quarter, in comparison to $255 in the previous quarter. One of the analysts at RBC Capital Markets – Mr. Mark Sue projected operating cash burn of $145 million.

“Our workforce restructuring is now complete, and we are focusing on revenue growth with judicious investments to further our leadership position in enterprise mobility and security,” Chief Executive Officer Mr. John Chen said. He underscored his expectations for the company to achieve breakeven cash flow by the end of the fiscal 2015 year, and non-GAAP profitability during the fiscal 2016.

However, the companys revenue failed to reach analysts projections, highlighting BlackBerrys uncertain future as its chief executive attempts to turn the company around with a push into new devices, software and mobile security services.

The company reported that its revenue over the second three months of the fiscal year declined by 42% to $916 million from a year earlier, coming short of analysts initial expectations of $950 million. BlackBerry generated approximately 46% of its revenue from hardware, 46% from services and 8% from software and other.

Mr. John Chen, who took over as CEO of BlackBerry about a year ago, shared that he wants the company to remain competitive in smartphones, while focusing further in areas like mobile data security and mobile device management.

In a sign of its determination to draw back business users to its smartphones, BlackBerry released its 4.5-inch square-screen Passport handset two days ago. The company also plans to unveil another device later in 2014.

BlackBerry surged 5.15% on Friday in Toronto to close the week at CAD11.44, marking a one-year change of +39.17% and valuing the company at CAD6.03 billion. Shares settled 4.69% higher at $10.26 on the NASDAQ. According to CNN Money, the 26 analysts offering 12-month price forecasts for BlackBerry have a median target of $9.00, with a high estimate of $12.00 and a low estimate of $5.00. The median estimate represents a -12.28% decrease from the last price of $10.26.