Blackberry does better than expected

the-who-the-kids-are-alrightTroubled smartphone maker BlackBerry is doing better thanks to its shift to its higher-margin software business.

The outfit reported better-than-expected adjusted earnings and raised its full-year growth forecast. However, analysts were a little worried about the company’s overall revenue growth which reversed many early gains.

BlackBerry Chief Executive John Chen told hacks that he expected it would take another four or five quarters to halt the steady decline in the company’s overall revenue.

Chen said that he did not consider the company in a turnaround phase anymore and now was planning growth.

BlackBerry has gone through a transition in recent years as it tries to build a software business not tied directly to its smartphones.

While still a year from overall revenue growth, investors cheered Blackberry’s improved outlook and the growing role of the software business – which includes mobile device management products, the QNX industrial operating system, and a range of recent acquisitions.

IDC analyst John Jackson said that the part of the business which represents Blackberry’s future was promising.

Chen said software sales should grow at least 15 percent in the fiscal year beginning in March, after sticking to a 30 percent growth target for the current fiscal year.

He declined to say how many devices BlackBerry and its partners sold in the third quarter, but said he hoped to close an outsourcing deal in India and nearby countries in the current period, following two similar deals.

BlackBerry said much of its software and services revenue was recurring in nature, requiring less spending and helping the company earn a record gross margin.

Software and services revenue rose to $160 million from $155 million a year earlier, while hardware sales dropped to $62 million from $220 million.

Revenue fell to $289 million from $548 million, missing the average of analyst estimates, while net losses widened to $117 million from $89 million. That included a write-down related to the sale of two data centres.