BlackBerry sells 1 million Z10 phones - KPTV - FOX 12

BlackBerry sells 1 million Z10 phones

By Julianne Pepitone
updated 7:35 AM EDT, Thu Mar 28, 2013

NEW YORK (CNNMoney) -- Goodbye Research In Motion, and hello BlackBerry. The newly rechristened smartphone maker sold 1 million of its new Z10 devices last quarter, and the company posted a surprise profit.

BlackBerry's fiscal fourth quarter, which ended March 2, was a transitional one. The company finally launched its long-delayed BlackBerry 10 operating system in January, and rolled out the first phone to run on the new software a few weeks later.

That phone, the Z10, launched in February in Canada, the U.K. and the United Arab Emirates -- only a few weeks before the end of the quarter. The Z10 went on sale in the United States at AT&T last Friday and hits Verizon stores today.

Overall, BlackBerry earned $94 million, or 18 cents per share, in the fourth quarter from its ongoing businesses. Analysts polled by Thomson Reuters had expected a the company to lose 29 cents per share. The company said it was able to swing to a profit due to a cost-cutting initiative that began during the quarter, including making its supply chain more efficient. BlackBerry lost $118 million a year ago.

"We have implemented numerous changes at BlackBerry over the past year, and those changes have resulted in the company returning to profitability in the fourth quarter," said Thorsten Heins, BlackBerry's CEO, in a statement.

Still, BlackBerry's sales of $2.7 billion during the quarter disappointed. Wall Street analysts had expected the company to bring in $2.8 billion in revenue. The company sold just 6 million total smartphones and its subscriber base fell to 76 million.

Investors knew BlackBerry's fourth-quarter results wouldn't say much about the success or failure of the newly launched phones. For that, analysts will be looking to the company's first-quarter results. BlackBerry said it expects to break even during the current quarter, despite raising its marketing spending by 50%.

Shares rose 7% in pre-market trading on the news.

BlackBerry's stock has enjoyed a strong comeback since the company said last year that the BlackBerry 10 would finally be unveiled in January after long delays. Shares are up 91% over the past six months, but the stock has been extremely volatile.

One reason for that is because many investors are still betting against BlackBerry. As of March 15, nearly one-third of shares were held by short-sellers who think that BlackBerry's stock will fall. That's a whopping percentage, and it has contributed to BlackBerry's wild swings as "shorts" are occasionally forced to buy up shares in order to cover their positions.

Ultimately, investors will want to see more evidence that BlackBerry's new phones can make a dent in what's a highly competitive mobile market.

Devices made by Samsung and others that run on Google's Android operating system have become popular. Apple is, of course, still a significant player. And Nokia is also gunning for smartphone users with new Lumia phones that run on mobile software from Microsoft.

 

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