Investors seem less than convinced the company is on track for a rebound, even as it reported a small profit and sooner-than-expected return to positive cash flow. Shares are up over 27% for the year to date.
"Revenue missed consensus by a sizable amount, which is especially troubling because it included one month of new BlackBerry Passport sales," Brian Colello, analyst at research firm Morningstar, said, referring to BlackBerry's new smartphone that sports a larger touchscreen and keyboard.
While speaking to analysts Friday during its quarterly conference call, John Chen, BlackBerry's CEO, cited weaker-than-expected hardware sales during the quarter. He said because of limited production, all device orders could only be fulfilled in the fourth quarter.
At a November analyst conference in San Francisco, Chen warned BlackBerry could disappoint as the company's revenue profile changes. It guided for a 50% decline in services revenue for fiscal year 2016 (ending February 2016), down from an expected fiscal-year 2015 level of $1.6 billion.
Chen reminded analysts today that BlackBerry is committed to better execution, saying, "Our focus now turns to expanding our distribution and driving revenue growth." He said the company "achieved a key milestone in our eight-quarter plan with positive cash flow." He expects breakeven or better cash flow from operations in future.