BlackBerry Ltd. (BB, Financial) reported its third-quarter 2018 earnings before the opening bell on Dec. 20, beating analysts’ forecasts.
The Canadian software company posted adjusted earnings per share of three cents, beating the breakeven estimates. Revenue of $226 million beat expectations of $215.4 million but decreased 25% from the prior-year quarter.
The company said sales were boosted by an increase in software sales and licensing revenue. Enterprise software and services sales jumped 11.5% to $97 million, which set a record for the second consecutive quarter. Intellectual property and licensing revenue climbed 67% to $50 million. Sales in its BlackBerry Technology Solutions business were flat.
The trend in BlackBerry’s revenue growth over the past decade is illustrated in the graph below.
Shares rose more than 7% in premarket trading following the announcement.
Executive Chairman and CEO John Chen commented on the company’s performance, lauding its improvement.
“Our progress, in both our financial and strategic objectives, is notable," he said. "We achieved records in software and services revenue and total company gross margin; breaking the records we set last quarter. We expanded our position in key verticals and geographies, with many new partners and highly competitive customer wins."
The company maintained its guidance for fiscal 2018. Revenue is expected to range from $920 million to $950 million. In its software and services segment, sales are projected to grow between 10% and 15%. Non-GAAP EPS and free cash flow are expected to be positive.
"BlackBerry's market opportunity is significant and, based on our progress so far in FY18, I am pleased with our near-term outlook and longer-term potential," Chen said.
Of the gurus invested in BlackBerry, PRIMECAP Management (Trades, Portfolio) has the largest position with 14.02% of outstanding shares. Prem Watsa (Trades, Portfolio), Jim Simons (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Kahn Brothers (Trades, Portfolio), the Signature Select Canadian Fund (Trades, Portfolio), Francis Chou (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) are also shareholders.
With a market cap of $6.26 billion, BlackBerry was trading around $11.90 on Wednesday with a price-earnings ratio of 13.28, a price-book ratio of 2.35 and a price-sales ratio of 6.27. GuruFocus estimates the stock has gained 58% year to date.
Disclosure: I do not own any stocks mentioned.
