(The Canadian Press) TORONTO - BlackBerry (TSX: T.BBB, Stock Forum) delivered a profit in its fourth quarter, as the smartphone maker boosted earnings by cutting costs and launching its new high-end touchscreen smartphone, but the results also showed its loyal subscriber base is waning.
Investors reacted by sending the stock up 2.3% Thursday to $15.13, leaving the company with a market cap of $7.9 billion, based on 524.2 million. The 52-week range is $18.49 and $6.10.
The results surprised analysts who were expecting a loss from the company that spent much of the quarter rolling out its new BlackBerry Z10 smartphone in key markets around the world.
"We've made great progress and we're proud of it, but we're also well grounded," said president and CEO Thorsten Heins in a conference call with analysts.
"Everyone at BlackBerry understands there's more work to do, and delivering BlackBerry 10 and getting back to a profitable quarter is just our starting line — not the finish line."
The company said it will boost its marketing spending in its first quarter to support the launch of its new smartphones and rollout in various international markets.
Marketing spending will increase by 50 per cent, it said, though it did not provide specific financial commitments.
In a press release, The Waterloo, Ont.-based company, which formerly called itself Research In Motion, reported a profit of US$98 million or 19 cents per share for quarter ended March 2, compared with $125 million or 24 cents per share loss a year ago.
Analysts had expected on average a loss of 29 cents per share, according to estimates compiled by Thomson Reuters.
During the quarter, BlackBerry shipped about one million smartphones on its new BlackBerry 10 operating system. The results were the first time BlackBerry provided details on how many of its new devices were shipped in regions like Canada and the U.K., though the total does not include sales from the U.S. launch last week.
About 55 per cent of customers who have bought the BlackBerry touchscreen phone are migrating from competitor's devices, Heins said. However, overall shipments of BlackBerrys, which include older models, dropped to six million devices from 6.9 million in the third quarter.
BlackBerrys subscriber base, which had been growing until the third quarter, was also on the downswing with a decrease to 76 million from 79 million, a sign that more people ditched their Blackberry in favour of competitors' phones.
The drop was mostly in North America and Europe, though it was partly offset by more subscribers in Latin America and Asia.
Revenue increased to $2.68 billion, coming in below expectations of $2.84 billion, according to a poll of analysts by Thomson Reuters.
"At this point, it's cautious optimism," said Colin Cieszynski, a market analyst at CMC Markets Canada of the results.
"They have still obviously have a long road to go to get back to where they were. They have very formidable competition but so far they seem to be doing OK."
BlackBery also announced Thursday, co-founder Mike Lazaridis will step down as director of the company on May 1, though he has no plans to sell his large stake in the firm.
Lazaridis is the company's second biggest shareholder with a 5.7 per cent stake.
In its outlook, BlackBerry said it expects to reach "breakeven" results in the first quarter of its current financial year based on lower costs, a more efficient supply chain and improved hardware margins.
BlackBerry has yet to launch the keypad version of its new smartphones, though Heins said it remains on track to hit stores next month.
Heins said the company chose to launch a touchscreen model before the keypad version to address the growing popularity of employers allowing their workers to use the phone of their choice at the office, a trend known as "bring-your-own-device" within the industry. Many employees have gravitated towards touchscreen phones like Apple's iPhone and Android devices like the Samsung Galaxy S3.
"This is where we need to be," Heins said.