BlackBerry (NYSE: BB) reported weaker-than-expected revenue for the second quarter on Tuesday, sending shares its down 19% in premarket trade. The communications software provider was hurt by lower demand for its software from government agencies and companies amid intensifying competition.
The Waterloo, Ontario-based company also announced that Steve Rai will begin serving as its chief financial officer from October 1, replacing Steve Capelli. Rai has been serving as the BlackBerry’s deputy chief financial officer. Capelli is moving into the newly-created position of chief revenue officer.
U.S.-listed shares of BlackBerry were down 19.84% to $6.02 apiece at the time of writing. The stock has given away more than 15% since the beginning of the year.
BB Earnings & Outlook
BlackBerry reported a net loss of $44 million, or $0.10 per share, in the quarter, compared with a net loss of $43 million, or $0.04 per share, in the same period last year. Adjusted for one-time items, the company had breakeven per-share earnings, versus Wall Street’s expectations of $0.01 per share.
Revenue came in at $244 million, up 16% from revenue of $210 million in the earlier-year period. Analysts polled by Refinitiv were expecting the company to post revenue of $266 million.
Looking ahead, BlackBerry forecasts revenue growth to be in the range of 23% to 25% for its fiscal 2020, driven by non-GAAP profitability for the year as well as a “double-digit percentage increase” in year-over-year billings. The company had earlier projected revenue growth of 23%-27% for the fiscal year.
BlackBerry CEO Comments
“In the quarter, our QNX, Cylance and Licensing businesses executed at or better than our expectations. We achieved break-even non-GAAP earnings per share and generated free cash flow even with increased investments in sales and product development to support future growth,” said John Chen, Executive Chairman and CEO, BlackBerry.
“We are encouraged by the positive reception on BlackBerry Intelligent Security, and we have a number of exciting new product launches in the next six months. Recent market consolidation has validated our thought leadership and the holistic strategy we shared last year. We are integrating our endpoint management and AI technologies and capabilities on one platform to address the high-growth endpoint security market.”
BlackBerry Ltd Profile
BlackBerry, formerly Research in Motion, designs and markets wireless handsets, software, and services. Its primary revenue drivers are the sale of handsets to customers for personal and corporate use, a variety of software products used in embedded systems and for mobile device management, and service access fees from wireless carriers associated with securing and processing wireless data traffic. BlackBerry also owns QNX, a leader in software used in automotive infotainment systems. – Warrior Trading News
