Investors were expecting another link in a chain of five quarterly losses but instead were greeted with a profit and a reaffirming of guidance. Shares immediately soared in premarket trading and opened at more than $9 for the first time since March.
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BlackBerry reported a $23 million GAAP profit, or 4 cents per share. After removing one-time items, the reported net loss was 11 cents per share, markedly better than the 27 cent-per-share loss expected by analysts.
Operationally, the company expanded gross margins by 5% to reach 48%. A changing product mix is enabling BlackBerry's margin expansion and makes it difficult to make meaningful year-over-year comparisons. In North America, BlackBerry has all but exited the low-end consumer handset space after Apple (AAPL) and Google's (GOOG) phones destroyed BlackBerry's market share.
I've remained bullish for more than a year and continue to believe shareholders sitting on their hands and waiting will be rewarded. I'm even bullish on the handset division in some areas of the world. It's easy to dismiss the handset business as a total failure, but it's simply not the case. BlackBerry reported the launch of the Z3 device in Indonesia, one of the largest and fastest-growing markets in the world.