BlackBerry's efforts to make a turnaround seem to be paying off, as the struggling handset maker earned profit in the last quarter of its financial year, even though revenues continue to slide.
The Canadian company surprised analysts with quarterly net profit of $28 million in the fourth quarter ended 28 February, but its overall revenues fell to $660 million from $976 million a year ago and below analysts' expectation of around $790 million.
"Our focus this past year was on getting our financial house in order while creating a multi-year growth strategy and investing in our product portfolio. We now have a very good handle on our margins, and our product roadmaps have been well received," said Executive Chairman and CEO John Chen in a statement.
BlackBerry's revival plans of shifting its revenue model from hardware-driven to software-driven are showing some positive signs, as the income from the software division shot up by 20 percent to $67 million in the quarter.
The company aims to double its revenues from software business to $500 million in the next fiscal.
Income from software sales was $234 million during the fiscal year 2015, and the company expects the growth in software division to pick up over the next two quarters with sales of BES 12, the mobile-device-management software it launched in November last year.
The silver lining in the company's transition efforts is the continued rise in its cash position, which stood at $3.27 billion at quarter end, putting the company in a strong position to acquire providers of mobile security software to enhance sales.
But the continuing slide in revenue highlights the challenges the company faces in selling smartphones. It sold 1.6m of Blackberrys in the quarter ended 28 February, less than half the number it sold in the corresponding period last fiscal.
"BlackBerry continues to do a good job controlling operating expenses and eliminating its cash burn during its business transition, but the total revenue was still a big miss and we still have concerns about the demand side," said Morningstar analyst Brian Colello, to Reuters.
The company's share price, which trades at around $9.6, fell 95 percent from a high of $230 in 2007, owing to its failure to compete with Apple and touchscreen smartphone technology.
