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Canadian communications company BlackBerry reported Q3 earnings Wednesday reflecting it's enterprise software build out. Investors like the improved margins despite continuing revenue declines seeing shares up 12% premarket. Shares had already risen 57% this year

Blackberry

Earnings: Ajusted EPS of 3 cents a share for quarter ended Nov. 30 beating analyst consensus breakeven forecast, according to Thomson Reuters I/B/E/S.  Revenue was $226 million in Q3 vs. $289 million in the same period last year.but beating the average forecast of $215.4 million. On a GAAP basis a loss of 52 cents per share or $275 million, compared to GAAP losses of 22 cents per share or $118 million in last year’s third fiscal quarter.

Reaction: Blackberry NYSE $BB $12.20 +$1.31 +12.05

Highlights

  • Record software and services revenue of $199 million on a non-GAAP basis and $190 million on a GAAP basis. Consensus for software and services revenue was $187 million.
  • BlackBerry’s gross margin also hit a new record high at 77% on a non-GAAP basis and 74% on a GAAP basis. Adjusted EBITDA amounted to $35 million.
  • New customers include NATO, the U.S. Department of Justice, the Dutch Government, Deutsche Bank, and the U.S. Department of Defense.
  • $BB  signed a patent licensing agreement with Teletry during the quarter.

Cash Position

Blackberry  cash and cash equivalents and investments stood at about $2.5 billion as of the end of November. Debt was $605 million for its debt and the net cash balance was about $1.9 million.

As expected, the cash impact from the Nokia arbitration will be recorded in the fourth fiscal quarter.

BlackBerry Maintains Guidance

BlackBerry maintained its previous guidance for the full fiscal year.  $BB expects non-GAAP revenue between $920 million and $950 million for fiscal 2018 and to be in the mid to high end of the provided range.

$BB  expect non-GAAP software and services revenue of 10% to 15% for the full year and post positive adjusted earnings per share for the full year. They also still expect to be free cash flow positive, excluding impacts from arbitration awards and damages, restructuring charges and the transition from hardware to software.

Source: Blackberry Ltd

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