BlackBerry CEO 'Pleased' With $42 Million Loss

NEW YORK ( TheStreet) -- BlackBerry ( BBRY) announced that it narrowed its losses but revenue continued to sink in the fiscal fourth quarter. But that didn't stop CEO John Chen from boasting that he was "pleased" with the results.

Although reporting a $42 million loss on revenue of $976 million (off 18% from the previous quarter and 64% from the year before), the loss was only 8 cents a share, excluding one-time charges. Analysts had been predicting a loss of 55 cents. GAAP loss was $423 million, or 80 cents share.

Blackberry shares were gaining nearly 2% to $9.22 in premarket trading following the announcement.

Revenue estimates had been $1.1 billion following last quarter's $1.19 billion and last year's $2.7 billion fourth-quarter numbers. In the latest fourth quarter, $546.6 million came from BlackBerry services ($562 million has been estimated), $362.1 million from hardware ($446 estimated.) while $68.3 million came from software after estimates had been in the $59 million range.

Adjusted fourth-quarter gross margin was 43%, up from 34% in the fourth quarter a year earlier. Total operating expenses were down significantly from $906 million a year ago and $865 million in the previous quarter to $601 million in the fourth quarter. Analysts had been predicting $766 million.

The company is hoping to report a positive cash flow by this time next year. Chen said "BlackBerry is on sounder financial footing today with a path to returning to growth and profitability."

In the previous quarter, BlackBerry announced it sold less than 2 million smartphones, which was off more than 70% from its sales numbers in the previous year. The company was forced to take a $1.6 billion write-off on its unsold inventory, mostly from new BB10 smartphone devices. And that was on top of a nearly $1 billion inventory hit it had to deal with in the previous quarter.

To help the situation, Blackberry has entered into a five-year partnership agreement with Foxconn to manufacture its smartphones. It is also in the process of restructuring all of its businesses, firing employees (for the most part in its devices division) and selling off real estate properties in the U.S. and Canada and leasing back space for a newer, leaner company.

BlackBerry is hoping its recent moves will help slash the company's operating costs in half by the end of its first quarter in May. 

The company has begun having some success by offering its BBM service to Apple ( AAPL) users as well as fans of Google ( GOOG) Android devices from Samsung, LG and others. "Line" and "WeChat," in particular, have been good at generating in-app streams of revenue by offering

BlackBerry's appeal to enterprise users still remains strong despite a somewhat constant drain of customers to other platforms. It was down from nearly 80 million in 2013 to a reported 55 million at the end of last quarter. BBRY has been trying to counter the steady customer drain with its BlackBerry Enterprise Server (BES) offerings for iOS and Android devices.

-- Written by Gary Krakow in New York.

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Gary Krakow is TheStreet's Senior Technology Correspondent.

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