BlackBerry Ltd. slipped as much as 4.2 percent after posting a wider-than-anticipated quarterly loss and handsets shipments at the lowest since 2007 even as the new keyboard-equipped Classic phone went on sale.
Although BlackBerry’s renewed focus on software is beginning to take hold, the company still has a long way before businesses like security-focused software make up for the slump in smartphone sales.
Software revenue jumped 153 percent to $137 million in the period ended May 30, initially sending the shares up as much as 11 percent in early trading. The stock then reversed to a drop, as analysts asked for details on software revenue growth excluding acquisitions and intellectual-property licensing during a conference call. Adding to investors’ jitteriness, Chief Executive Officer John Chen told shareholders at the annual meeting that the company isn’t for sale “at this price.”
“There was some initial excitement over the software number but that proved to not have reflected the core business,” said Colin Gillis, an analyst at BGC Financial LP.
The shares fell 3.8 percent to $8.85 at 12:42 p.m. New York time. They had declined 16 percent this year through Monday, while the Nasdaq composite Index gained 8.8 percent.
Chen’s goal to reach $500 million in software revenue by March 2016 is key to his turnaround effort. The company has bought three security-focused software companies since July to help reduce its reliance on handsets.
“It’s just safe to say I’m satisfied with the ability in the IP pipeline this fiscal year that will help us reach our 500 million target,” Chen said about his software goal during the call.
When asked whether he would consider a sale at the company’s meeting later in the day, Chen answered: “Oh no. no no no no, not at this price.”
Smartphone revenue fell to about $263 million from $379 million a year earlier.
BlackBerry, which used to dominate the world of mobile business, has seen its share of the global smartphone market slip to less than 1 percent after rivals like Apple Inc. and Samsung Electronics Co. came in. The Canadian company has since narrowed the target audience for its phones to financial professionals and government workers who demand a rigorous level of security.
In addition to an existing partnership with Foxconn Technology Group, BlackBerry entered into joint development and manufacturing agreements with Wistron Corp. and Compal Electronics Inc. to help reduce costs to make devices.
The first-quarter loss excluding certain items narrowed to 5 cents a share from 11 cents a year earlier, the company said Tuesday in a statement. Analysts predicted a loss of 4 cents, the average of analysts’ estimates compiled by Bloomberg.