Although BlackBerry’s quarterly revenue fell below $1 billion for the first time in seven years, its loss was less than expected, and the company did secure the Pentagon as a customer.
This marks BlackBerry’s ninth successive quarter of operating losses, leaving the company with a net loss of $5.8 billion for its just-ended fiscal year, The Guardian reported.
The loss was smaller than expected and its U.S. revenue was slightly higher than what analysts had predicted. These numbers led Canaccord Genuity analyst Michael Walkley to reiterate his HOLD rating and increase his target price on BlackBerry’s stock to $8.
“While we remain impressed with BlackBerry’s execution on its cost reduction initiatives, we believe the new management’s long-term plans are still in early stages of execution with limited near-term sales visibility, and we anticipate BlackBerry will continue to post operating losses through F2015. We anticipate gradually improving trends following the BES12 launch in November and believe BlackBerry could achieve break-even results exiting F2016,” Walkley said.
Many of BlackBerry’s problems can be attributed to the lack of interest in its BB10 platform, which has been outsold by the older BB7 model every quarter. However, the U.S. Department of Defense did clear BB10 for use on the Pentagon’s networks, making it the only device to meet the department’s guidelines.
“There are three good pieces of news in this item: cash, better-than-expected profits and a key win,” Yankee Group Senior VP of Research Wally Swain noted. “The Pentagon and the White House are the most important clients in BlackBerry’s core enterprise market, especially now that BB10 devices have fallen flat with consumers and the company has refocused on its core franchise. Sexier consumer-oriented devices from Apple and Samsung, combined with a renewed Knox business suite from Samsung and even the brand crossover threat from Lenovo, are BlackBerry’s biggest challenge during its recovery.”