Blackberry beats expectations in Q1 2015 earnings report
Revenue falls only 1 percent, as net income for the first quarter was $23 million, or $0.04 earnings per share
Waterloo, ON – June 19, 2015 — BlackBerry Limited, a global leader in mobile communications, today reported financial results for the three months ended May 31, 2014 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).
- • Cash and investments balance of $3.1 billion at the end of the fiscal first quarter, up from $2.7 billion in the prior quarter
- • Adjusted Q1 gross margin of 48%, up from 43% in the prior quarter
- • Reduced adjusted operating expenses by 57% year over year and 13% quarter over quarter
- • Successfully launched the new Z3 device in Indonesia; 8 additional countries to follow
- • EZ Pass Program resulted in a total of 1.2 million licenses issued for BES10, including more than 10% of
- total licenses traded in from competitors’ Mobile Device Management platforms
- • Launched Project Ion focused on the “Internet of Things” market
Revenue for the first quarter of fiscal 2015 was $966 million, down $10 million or 1% from $976 million in the previous quarter. The revenue breakdown for the quarter was approximately 39% for hardware, 54% for services and 7% for softwareandotherrevenue.
During the first quarter, the Company recognized hardware revenue on approximately 1.6 million BlackBerry smartphones compared to approximately 1.3 million BlackBerry smartphones in the previous quarter. During the first quarter, approximately 2.6 million BlackBerry smartphones were sold through to end customers, which included shipments made and recognized prior to the first quarter and which reduced the Company’s inventory in channel.
GAAP net income for the first quarter was $23 million, or $0.04 earnings per share (“EPS”). The net income includes non-cash income associated with the change in the fair value of the Debentures of $287 million (the “Q1 Fiscal 2015 Debentures Fair Value Adjustment”) and pre-tax restructuring charges of $226 million related to the Cost Optimization and Resource Efficiency (“CORE”) program. Excluding these items, adjusted loss for the first quarter was $60 million, or $0.11 per share. These impacts on GAAP net income and EPS are summarized in the table below.
The total of cash, cash equivalents, short-term and long-term investments was $3.1 billion as of May 31, 2014, compared to $2.7 billion at the end of the previous quarter — a net increase of $429 million. Excluding receipt of a tax refund of $397 million and proceeds on the sale of real estate of $287 million, the Company used $255 million in the first quarter. This represents a decrease from $784 million used last quarter, after excluding proceeds of $250 million related to convertible debt issuance. Purchase obligations and other commitments amounted to approximately $1.8 billion as at May 31, 2014, with purchase orders with contract manufacturers representing approximately $317 million of the total.
“Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio,” said John Chen, Executive Chairman and Chief Executive Officer of BlackBerry. “Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement. Looking forward, we are focusing on our growth plan to enable our return to profitability.”