BlackBerry reported an unexpected profit for its first quarter this fiscal year on Friday, but it wasn’t enough to rally Wall Street behind the software and services company.
Shares of BlackBerry’s fell around 6 percent following its earnings report, which revealed sales that came in below analysts’ expectations.
BlackBerry reported first-quarter revenue of $244 million for the period. Analysts had estimated $264.4 million, according to Thomson Reuters. Enterprise software and services revenue — something analysts who follow the company have been monitoring more closely — declined to $101 million, from $106 million one year ago.
Further, BlackBerry said it received 3,000 orders from enterprise customers in the first quarter, below the 3,500 orders it received in the fourth quarter.
Profit came in slightly above expectations, however. The company posted first-quarter earnings per share of 2 cents, adjusted, topping a Thomson Reuters consensus forecast of 0 cents.
A surprise for many, the company managed to swing to a net profit of $671 million, or $1.23 per share, in the first quarter, from a loss of $670 million, or $1.28 a share, in the same period one year ago.
“In Q1, we made great progress strengthening our strategic position in emerging growth markets, most notably in cybersecurity and the Enterprise of Things,” CEO John Chen said in a statement.
“We secured key design wins in high growth segments of automotive technology, including advanced driver assist, digital instrument cluster and our hypervisor solution. Our ecosystem is growing with Qualcomm and NVIDIA adopting BlackBerry technology for their automotive platforms. … Our financial foundation is solid.”
The company has maintained its outlook for fiscal 2018, a period in which BlackBerry expects to be profitable on an adjusted basis and generate positive free cash flow.
“We expect growth at or above the overall market in software and services,” CEO Chen said.
As of Thursday’s close, prior to Friday’s decline, shares of BlackBerry had climbed about 60 percent for the year-to-date period.
Earlier this month, the stock spiked following a bullish analyst note, which said BlackBerry will play a key role in autonomous cars and the internet of things. The company has also been called the perfect takeover target.
BlackBerry also announced Friday it would buy back up to 31 million shares, or 6.4 percent of its outstanding public float. The buyback is designed to offset some of the expected dilution from BlackBerry’s equity incentive plan, the company explained.
BlackBerry’s total cash balance has now increased to $2.6 billion as of the end of its fiscal first quarter.