3 things you need to know about BlackBerry’s earnings report

BlackBerry surprised analysts today by releasing a financial earnings report for its fourth quarter that showed profits instead of losses.

The shipment of 1 million BlackBerry Z10 smartphones in the limited markets where it was launched this quarter (namely Canada and the U.K.) helped the Waterloo, Ont.-based firm rake in a $219 million profit when most analysts were calling for a loss. With the Z10 just being on the U.S. market since March 22, the sales numbers for the Z10 are quite strong considering the market size. BlackBerry’s stock is up today as a result and the earnings are generally being taken as a good news story for Canada’s largest tech company.

Aside from the sales of its flagship device, there’s other fascinating kernels of information in the earnings report that both give us insights into BlackBerry and raise more questions.

Less revenue, more profit

While the Z10 sales were good and all, overall revenue for BlackBerry declined. The fact the firm still came out with a profit on the bottom line speaks to the work CEO Thorsten Heins has done reorganizing the company. The firm today looks much different than it did when the former COO took the helm last year.

BlackBerry refers to its Cost Optimization and Resource Efficiency (CORE) program in the earnings report, which was started in March 2012. Basically, it shows that BlackBerry reduced its employee base considerably this quarter. It had to pay out some benefits as a result, but was a one-time cost. Under Heins, BlackBerry is a meaner and leaner operation.

Wither the PlayBook?

The PlayBook recently got an upgrade to LTE wireless and a faster processor, but otherwise remains the same basic 7-inch tablet. BlackBerry sold only 370,000 tablets in the quarter. The paltry number begs the question as to what BlackBerry’s tablet strategy is now.

BlackBerry 10 was based upon the same QNX platform used by the PlayBook. But BlackBerry has been fairly quiet about how it will evolve the platform for the larger screen format. Rumours have circulated that a 10-inch PlayBook will hit the market this year. When will the firm start talking about its development of that device?

Back to the future for Lazaridis

The earnings report also announce that co-founder Mike Lazaridis is retiring from his vice chair and company director role. It completes the full separation of BlackBerry from its creator and the transition to Heins’ leadership. So will Lazaridis be spending his time playing golf and gardening now?

Hardly. He’s up to new tricks with an old partner. Doug Fregin was the other co-founder of BlackBerry in 1984 and is now a managing partner in Quantum Valley Investments. Lazaridis has also brought on board an impressive team to act as a scientific advisory committee that includes Steve MacLean, former president of the Canadian Space Agency, and Neil Turok, the director of the Perimeter Institute for Theoretical Physics.

The fact that Lazaridis has assembled a team of geniuses to explore the commercialization of a radically different type of technology is fortuitous. With proclamations being made by Lazaridis that “nothing you see in the classical technology world can prepare you for what you will see in the quantum technology revolution,” we can expect big things out of this group.

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jacksonhttp://www.itbusiness.ca
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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