BlackBerry shares soar 5% after reporting Q2 2017 earnings and the end of hardware manufacturing
Wall Street got some of the news it was expecting from BlackBerry today. Last week, we passed along a report from investment blog The Motley Fool, which correctly predicted that the manufacturer would close its hardware division on September 28th. Leaving hardware to others was good enough news to send BlackBerry's shares soaring nearly 5% this morning to $8.36.
BlackBerry also reported its fiscal second quarter 2017 earnings and you can see why it is dropping hardware manufacturing. GAAP software and services revenue reached $334 million for the three month period, rising a strong 89% year-over-year. Non-GAAP revenue for the pair hit $352 million, a year-over-year gain of 111%. 81% of this revenue is recurring, and the company reported 3,000 enterprise customer wins for the three month period ended August 31st.
BlackBerry has revised upward its full fiscal year non-GAAP EPS estimate. Previously, the company was forecasting a loss of 15 cents a share. It now expects to report in a range of breakeven to a loss of five cents a share for fiscal 2017.
source: MarketWired
Hardware reported an $8 million operating loss for the quarter. Overall, Non-GAAP operating earnings came to $16 million resulting in a breakeven earnings per share figure. GAAP operating income showed a loss of $355 million. As usual, BlackBerry has a large amount of cash, cash equivalents, short-term and long-term investments ($2.5 billion) socked away on the balance sheet as of the end of the quarter.
"We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold. In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company's history. We also completed initial shipments of BlackBerry Radar, an end-to end asset tracking system, and signed a strategic licensing agreement to drive global growth in our BBM consumer business."
"We remain on track to deliver 30 percent revenue growth in software and services for the full fiscal year. We are revising upward our non-GAAP EPS outlook to a range of breakeven to a five cent loss, compared to the current consensus of a 15 cent loss. This reflects increased confidence based on improving margins and reduced interest expense from the recent refinancing of our debt, as well as planned investments in growth areas."-John Chen, CEO, BlackBerry
"We remain on track to deliver 30 percent revenue growth in software and services for the full fiscal year. We are revising upward our non-GAAP EPS outlook to a range of breakeven to a five cent loss, compared to the current consensus of a 15 cent loss. This reflects increased confidence based on improving margins and reduced interest expense from the recent refinancing of our debt, as well as planned investments in growth areas."-John Chen, CEO, BlackBerry
source: MarketWired
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