BlackBerry’s profit beats expectations

NEW YORK: BlackBerry Ltd reported better-than-expected adjusted earnings for the sixth straight quarter, as the smartphone pioneer's shift to the higher-margin software business paid off.

The Canadian firm also said on Friday it expects to be profitable on an adjusted basis for the second year in a row, and generate positive free cash flow in the year ending February 2018.

The company's U.S. shares closed up 11.5 percent at $7.75 on Friday, and its Toronto-listed shares closed up 11 percent at C$10.30.

Waterloo, Ontario-based BlackBerry has focused on building a robust software business after scrapping production of its once-iconic smartphones, which lost favor with the arrival of sleek and fully touchscreen handsets.

The company outsourced the development of its smartphones last year, signing a deal with Indonesia's BB Merah Putih to make and distribute new BlackBerry-branded devices. It has also signed similar deals with China's TCL and India-based Optiemus Infracom Ltd.

Adjusted revenue from the software and services unit, which includes mobile device management products and the QNX industrial operating system, rose 12.2 percent to $193 million in the fourth quarter ended Feb. 28, from the preceding quarter.

QNX is crucial to BlackBerry's efforts in the self-driving vehicle industry. The company already has a partnership with Ford Motor Co to develop autonomous driving software, and Chief Executive John Chen hopes to forge such deals with carmakers around the world.