Shares of Canadian technology company BlackBerry Ltd. (TSX:BB)(NYSE:BB) took a dramatic hit since reporting earnings late last week. This drop was primarily due to a significant revenue drop of approximately 20% in the company’s enterprise division, a drop which a number of analysts have noted was due, in part, to changing accounting methods during this most recent period.
The volatility which has underpinned shares of the former smartphone maker has driven many investors to search elsewhere for value within the technology sector. A shell of its former self, BlackBerry is continuing to turn its business on its head, focusing almost exclusively on the software portion of its business which it hopes will transform the company into a mainstay software firm in niche sectors such as autonomous vehicles.
The company’s software and sales quarterly revenue did come in 18% higher on a year over year basis, and the firm did report a loss of $60 million U.S., disappointing investors who saw a profit of $671 million U.S. last year during the same quarter. Last year’s quarterly results were driven by an arbitration award of $940 million U.S. stemming from a long-standing dispute with Qualcomm Inc (NASDAQ: QCOM)
On the whole, BlackBerry appears to be heading in the right direction; a quarterly loss is never a good thing, and investors who were hoping for continued quarterly profitability most certainly were disappointed. That being said, the road to becoming a pure play software company has only just begun, and if BlackBerry’s management team can execute on its long-term plan, investors should be rewarded for patience in this current environment.
Invest wisely, my friends.
