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BlackBerry Makes Progress on Its Turnaround With Strong Quarter

BlackBerry Ltd. To Stop Manufacturing Classic Smartphone ModelBlackBerry Ltd. To Stop Manufacturing Classic Smartphone Model
A man enters the BlackBerry headquarters building in Waterloo, Ontario, Canada, on July 6, 2016.Photograph by Cole Burston — Bloomberg via Getty Images

Canada’s BlackBerry, reported better-than-expected quarterly earnings on Friday, as operating costs nearly halved, and said it expects to be profitable on an adjusted basis in 2018.

The company’s U.S.-listed shares were up nearly 5% at $7.29 before the bell.

BlackBerry has shifted away from making its once-iconic smartphones to building a software business, which includes mobile device management products and the QNX industrial operating system.

The company’s adjusted revenue from software and services rose 12.2% to $193 million in the fourth quarter ended Feb. 28, from the preceding quarter.

BlackBerry said it received more than 3,500 enterprise customer orders in the quarter.

“Looking ahead to fiscal 2018, we expect to grow at or above the overall market in our software business,” Blackberry Chief Executive John Chen said in a statement.

Chen said BlackBerry expected to be profitable on an adjusted basis and generate positive free cash flow for the year ending February 2018.

The Waterloo, Ontario-based company’s net loss narrowed to $47 million, or 10 cents per share, in the fourth quarter, from $238 million, or 45 cents per share, a year earlier.

The prior-year quarter included a loss of $127 million related to the sale of certain assets.

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Excluding one-time items, the company earned 4 cents per share. Analysts on average had expected the company to break even, according to Thomson Reuters I/B/E/S.

Operating expenses fell about 49% to $229 million.

Revenue fell about 38% to $286 million. On an adjusted basis, revenue was $297 million, beating analysts’ average expectation of $289.3 million.