BlackBerry on Friday reported a small adjusted third-quarter profit and returned to positive cash flow, but shares fell as revenue declined more than expected.
Revenue fell to $793 million from $1.19 billion a year earlier, falling short of expectations. Analysts expected $931.5 million.
Cash flow was positive $43 million in the third quarter, while the company had negative cash flow of $36 million in the second quarter. BlackBerry had said it was targeting break-even cash flow by the end of the fiscal year in February 2015.
Colin Gillis, tech analyst at BGC Partners in New York, said BlackBerry Chief Executive Officer John Chen did a good job controlling expenses to boost the company’s cash pile.
“The fact that he overachieved by turning cash flow positive this quarter. That’s a great milestone,” said Gillis. “It gets easier from here.”
Excluding, a one-time non-cash debenture charge and restructuring charges, the company reported a profit of 1 cent a share. Analysts polled by Thomson Reuters I/B/E/S expected a loss of 5 cents.
The Waterloo, Ontario-based company reported a net loss of $148 million, or 28 cents a share, in the quarter ended Nov. 29. That compared with a year-earlier loss of $4.4 billion, or $8.37 a share.
BlackBerry launched its long-awaited Classic smartphone on Wednesday, hoping to help win back market share and woo customers still using older versions of its physical keyboard devices. The phone resembles its once wildly popular Bold and Curve handsets.
BlackBerry also said Friday it has completed its acquisition of Secusmart, a privately held firm that specializes in voice and data encryption.
Waterloo, Ontario-based BlackBerry agreed to buy the German maker of encryption and anti-eavesdropping services in July, in a move to burnish its credentials with highly security-conscious clients like government agencies. The terms of the deal were not disclosed.
Secusmart’s technology is being used to protect the devices of government officials in both Canada and Germany, including the BlackBerry device used by German Chancellor Angela Merkel.