BlackBerry Ltd. shares rose the most in a year after the company reported earnings that beat analysts’ estimates and said it would expand into new markets, including health care.
Profit more than doubled in the three months ending Aug. 31 compared with a year earlier as the company reduced expenses. Net income was $43 million, compared with $19 million in the same period the previous year. On an adjusted basis, the company said it earned 4 cents a share, beating the average analyst estimate of 1 cent.
Since 2013, Chief Executive Officer John Chen has worked to transform BlackBerry from a fading phonemaker into a serious security-software provider. It offers a range of different product lines, such as systems to manage an entire company’s stable of mobile phones, for the finance and automobile sectors and various government agencies.
“We are thinking about growing our business and one area we didn’t have much of a footprint in is the medical health care world,” he said in an interview Friday. The company plans to release specifics at the BlackBerry Security Summit in New York next week.
BlackBerry shares jumped as much as 15 percent, the most intraday since September 2017, to $11.74. That brings their gains for the year to 5 percent.
Enterprise software and services revenue, the company’s most important growth metric, jumped 11 percent from the previous quarter, but was still down compared with last year. Chen said he expects software revenue to under perform through fiscal 2019, with an estimated double digit decline, due to an accounting change. However, he said revenue would start climbing again next year.
Adjusted total revenue in the second quarter was $214 million, compared with the average of analysts’ estimates of $210 million. The company predicts its revenue growth in the automobile sector to continue at 3 percent to 5 percent.
It has been almost five years since Chen took over as CEO at the Canadian company. 'The last five years have felt like 50 years,' Chen said. 'I used to have long hair and now I have short hair,' he laughed. While Chen conceded there have been painful and joyful days in the last half-decade, he said the future of BlackBerry is looking bright.
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