BlackBerry swings back to profit despite shrinking subscriber base

By on March 28, 2013, 3:00 PM

The future of BlackBerry as a relevant player in the modern smartphone market largely hinges on its newly released operating system. So how are things looking roughly two months after launch? Not great, but not nearly as bad as they were just a few short months ago, either. There are some positive signs of improving financial health as the company continues to rollout its full touchscreen Z10 handset globally.

During an earnings call for its latest quarterly financial results, the Canadian firm reported a surprise profit of $94 million on revenue of $2.7 billion. As much as 61% of the revenue generated during the quarter was from handset sales, with the remaining 36% coming from service fees and 3% from software and other services.

Handset shipments totaled 6 million, missing the 6.9 million estimate, although the gap was narrower for the Z10 in particular with 1 million units ‘shipped’ versus the 1.1 million forecast. It’s unclear how many of those were actually sold to end users since BlackBerry doesn’t report this data. The phone went on sale in the U.K. on January 31, in Canada on February 5, and then across Asia and Europe in the following weeks.

The BlackBerry Z10 didn’t arrive in the U.S. until last week through AT&T, Verizon and T-Mobile.

BlackBerry service subscribers decreased 3 million to 76 million. The company said the bulk of its customer losses could be attributed to prepaid subscribers switching away from its platform. CEO Thorsten Heins was optimist, though, noting that 55% of Z10 customers globally are coming from platforms other than BlackBerry. He also talked up the fact that they’re starting to see the benefits of a cost-reduction program launched last year, and claimed that they’re seeing “a new attitude and a cultural shift in the company.”

Besides discussing financial results the company also announced that Mike Lazaridis, co-founder and former co-CEO will be stepping down as a director and vice chairman of BlackBerry by May 1.

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