BlackBerry returns to profit but smartphone sales continue to slide

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Manufacturer recovers from a $423 million loss in the previous quarter to make a $23 million gain in 2015 fiscal Q1

BlackBerry returned to profit in fiscal 2015 but saw its decline in smartphone sales continue.

The company made $23 million (£12.5 million) in the three months to May 31. This compares to the $423 million (£299 million) loss made in the previous quarter and £84 million (£45.5 million) deficit from a year ago.

Excluding a one-off accountancy gain and restructuring charges, the company made a loss of $60 million (£32.5 million) during the quarter.

However, BlackBerry continued to experience a fall in smartphone sales. In Q1, it sold 2.6 million units through to end users, down from 3.4 million in the previous quarter and  6.8 million in 2014 fiscal Q1.

Revenue was down slightly by one pre cent sequentially to $966 million (£523.2 million) and from $3.1 billion (£1.7 billion) a year ago. This quarter’s revenue breakdown was 39 per cent for hardware, 54 per cent for services and seven per cent for software and other revenue.

Gross margin was 46.7 per cent – down from 56.7 per cent in the three months to March 1 but still up from the 33.9 per cent figure posted this time last year.

The manufacturer’s cash reserves for the latest financial timeframe was also up by $429 million (£232.4 million) from the previous quarter to $3.1 billion (£1.7 billion).

The news comes a day after BlackBerry announced that the Amazon Appstore will be available with the launch of the BlackBerry 10.3 OS this autumn. It will offer an additional 240,000 Android apps in addition to the current 220,000 apps currently available on BlackBerry World.

BlackBerry executive chairman and CEO john Chen said: “Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong portfolio.

Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement. Looking forward, we are focusing our growth plan to enable our return to profitability.”

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