BlackBerry ekes out a profit as revenue tumbles nearly 70 percent

The company sold only 2.6 million smartphones in the most recent quarter, continues to focus on enterprise services

BlackBerry managed to turn the tide toward a small profit during its fiscal first quarter, but revenue and phone sales continued to drop.

Revenue for the first quarter of BlackBerry's fiscal 2015, which ended May 31, was approximately $966 million, a steep drop of about 69 percent from $3.1 billion in the same quarter in 2013.

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The company's $23 million net profit for the period compares to a loss of $84 million a year earlier.

During the period, BlackBerry continued to see unit sales to end users shrink, to approximately 2.6 million BlackBerry smartphones. A year earlier, the company said it sold 6.8 million smartphones, and in the previous quarter BlackBerry sold 3.4 million units.

BlackBerry CEO John Chen said he was happy with the company's financial performance during the quarter. "We continue to make solid progress in our plan to return BlackBerry to growth and profitability," he said during a conference call to discuss the results.

Chen reiterated his forecast that the company will return to annual profitability in its 2016 fiscal year, and said BlackBerry has a solid pipeline and roadmap of new and improved products.

In particular, Chen highlighted the Z3 smartphone, which is already available in Indonesia and will be launched in eight other countries, as well as the launch of Project Ion, focused on the Internet of things market.

Chen also singled out that EZ Pass Program, which since its March launch has resulted in the issuance of 1.2 million licenses for BlackBerry Enterprise Service 10 (BES10). Most of the licenses have been BlackBerry Enterprise Server 5 (BES5) trade-ins, but 10 percent have been from competing mobile device management products, he said.

After focusing on cost cutting and margin improvement, Chen said, his attention is now on revving up revenue growth.

Chen also said that in the eyes of its enterprise customers, BlackBerry comes across as a viable vendor again, and that CIOs are now more comfortable investing in or retaining the company's products, which they've historically considered reliable and secure.

Wall Street gave BlackBerry a big endorsement after the earnings report, as excited investors sent the company's stock up more than 13 percent in late morning trading.

The results were announced a day after Blackberry announced it had signed a deal with Amazon to integrate the retailer's store for Android apps with BlackBerry 10.3 OS, which is planned for release this fall.

The change lets consumers access a larger number of apps and leaves BlackBerry to focus on expanding the number of enterprise apps. Chen's plan to save the company relies more on software than hardware, with enterprise messaging and mobile management tools for its own OSes, Android, and iOS.

For example, earlier this week BBM Protected, which lets users send encrypted instant messages, became available. It is the first application in BlackBerry's eBBM Suite, which will offer various kinds of secure messaging for enterprises. The current release works with BlackBerry smartphones running BB0S 6.0 or later or BlackBerry 10 in regulated work space mode only. Versions compatible with BlackBerry 10 Balance -- which separates work and personal content -- and iOS and Android devices, are expected later this year.

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