BlackBerry Pops Following Q3 Report

Shares of BlackBerry Ltd BBRY were trading higher by more than 3 percent early Tuesday after the company reported its third quarter results. BlackBerry posted an adjusted earnings of $0.01 per share in the quarter on revenue of $301 million. Wall Street analysts were expecting the company to lose $0.01 per share on revenue of $332 million.

Earnings

BlackBerry's Software & Services segment accounted for 55 percent of the total revenue while the Service Access Fees (SAF)) segment accounted for 22 percent and the Mobility Solutions segment accounted for the remaining 23 percent.

Among the Software & Services segment, approximately 80 percent of revenue was recurring.

At the end of the quarter the company held $1.6 billion in cash and cash equivalents, which reflects a use of free cash of $154 million in the quarter. The majority of the cash spent was attributable to working capital and supplier purchase commitments related to transitioning the device hardware business to a software licensing model.

Excluding BlackBerry's $605 million in debt, the net cash balance stood at around $1 billion.

During the quarter BlackBerry signed an agreement with Ford Motor Company F to expand the use of BlackBerry's QNX and security software.

BlackBerry also recently announced a long-term agreement with TCL Communication.

Outlook

BlackBerry's CEO John Chen offered the following outlook in the company's earnings report:

"We remain on track to deliver 30 percent growth in company total software and services revenues for the full fiscal year. We are raising our outlook on profitability for FY17. We now expect to achieve non-GAAP EPS profitability for the full year, up from a prior range of breakeven to a five cent loss. This is the third consecutive quarter we have increased our EPS outlook, reflecting the traction we are achieving in our shift to a software business model. We also anticipate breakeven non-GAAP EPS and approximately breakeven free cash flow in Q4."