Blackberry (TOR: RIM.TO) Results Surprise

Blackberry has posed a string of surprises in recent quarters. Less than a year ago, many were predicting their demise, citing their lackluster product lineup, and failure to compete in the consumer space with behemoths like Apple and Samsung. Despite the uphill battle, the once star performer continues to outperform expectations.

Blackberry was once a ubiquitous device, part of the arsenal of virtually every executive in the country. But, as the critics say, they failed to innovate. They stagnated, and rested on their laurels. With time, Apple’s iPhone and Samsung’s Galaxy line of products have come to own the retail market. The business market remains enormous for Blackberry, but observers have worried if that too would fall in time. Now, the firm is launching new products and operating systems, receiving rave reviews, and more importantly, profits in the process.

BlackBerry reported a surprise quarterly profit, but its subscriber base fell slightly more than expected, and revenue remained far below year-earlier levels. The Waterloo, Ontario-based company said it sold about 1 million of its new Z10 touchscreen smartphones in the fourth quarter ended March 2. It shipped roughly 6 million smartphones in that time. “I think the 1 million units is a nice start,” said Morningstar analyst Brian Colello. “I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability.” The Z10 is the first in a line of devices powered by BlackBerry’s new BB10 operating system. It is a key part of the company’s attempt to regain relevance and win back market share in the smartphone arena that it once dominated.

The cell phone manufacturer’s stock has doubled in the past six months as the company prepared to launch its new BB10 operating system, a gadget designed to better compete with Apple iPhones and Google-based Android smartphones. BlackBerry, formerly known as Research In Motion, used a staggered roll-out in early March, which concerned observers. The phones are only just now becoming available in the United States, one of the company’s key markets. And it’s still unclear whether the new phones can command the spot in the corporate workplaces that BlackBerry once did.

Blackberry has a long road ahead of itself, to return to its former glory. If the firm can make inroads to the consumer market, it will spark one of the largest corporate turnarounds in recent history.