BlackBerry posts surprise revenue rise on higher software, licensing demandSeptember 24, 2020
(Reuters) – Canada’s BlackBerry Ltd posted a surprise 6% rise in quarterly revenue on Thursday, as sales of its security software product rose and its patent licensing business strengthened.
U.S.-listed shares of BlackBerry, which sells security software to companies and governments as well as infotainment software to carmakers, rose 6% in early morning trade.
BlackBerry’s QNX car software sales, which had been under pressure due to a pandemic-related weakness in the U.S. auto industry, also improved in the quarter. Demand for new vehicles has been recovering after hitting a bottom in April, as lockdown restrictions ease and buyers return.
“Some signs of recovery in auto production point to sequential revenue growth and a return to a normal run rate for QNX by early next year,” Chief Executive John Chen said in a statement.
The quarter benefited from higher sales of the company’s core security software, Spark, as businesses continue to strengthen their IT security to support remote working trends.
In a post-earnings call with analysts, the company said its patent licensing business also performed strongly, contributing $108 million to total revenue.
Morningstar analyst Mark Cash said BlackBerry Spark provides the company with future demand as enterprises and government entities work to protect and manage devices.
The company reiterated it full year revenue forecast of about $950 million. Analysts expect revenue to be $956 million.
Total revenue for the second quarter ended Aug. 31 was $259 million, while analysts were expecting it to drop to $237.03 million from $244 million a year earlier, according IBES data from Refinitiv.
Excluding items, the company reported a profit 11 cents per share, compared with analysts’ estimates of 2 cents per share.
Net loss narrowed to $23 million, or 4 cents per share, from $44 million, or 10 cents per share, a year earlier.
(Reporting by Ayanti Bera in Bengaluru; Editing by Vinay Dwivedi)