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BlackBerry revenue drops more than expected, shares fall 7%
[TORONTO] BlackBerry Ltd reported a larger-than-expected slide in fourth-quarter revenue on Friday amid weakness in hardware sales, sending its shares down 7 per cent in early trading.
The smartphone industry pioneer reported revenue of US$464 million in the quarter, down from US$660 million a year earlier. Analysts had expected US$563.2 million, according to Thomson Reuters I/B/E/S.
"The decline in hardware revenue is certainly a negative,"said Morningstar analyst Brian Colello. "We'd like to see more details into how close BlackBerry is to achieving its target of profitability."
Chief Executive John Chen told analysts that smartphone sales were below company expectations. This was partly due to delays in contract negotiations with carriers, including Verizon, about its Android-based Priv device, he said.
The Canadian company reported a net loss of US$238 million, or 45 cents a share, in the fourth quarter ended Feb 29, compared with year-earlier profit of US$28 million, or 5 cents a share.
Excluding one-time items, it lost 3 cents a share, against analyst expectations for a loss of 10 cents a share.
BlackBerry said it expected its software and services revenue to grow faster than the overall mobility software market, at around 30 per cent.
"We have clearly gained traction and market share in enterprise software," CEO Chen said in a statement.
The company said just under a third of its revenue came from software and services. Service access fees still contributed 29 per cent, and 39 per cent was from hardware and other revenue.
Software and licensing revenue for the year came to US$527 million, exceeding BlackBerry's target of US$500 million.
Shares of BlackBerry were down 7 per cent at US$7.53 in trading before the Toronto market opened.