BlackBerry swings to loss, misses revenue expectations

Shares in BlackBerry slumped in pre-market trade on Tuesday as the security software provider swung to a second-quarter loss, missed revenue expectations and downgraded its annual revenue guidance.

The company recorded a net loss of $44m for the three months ended 31 August compared to a profit of $43m a year earlier, as adjusted revenue rose 24% to $261m but fell short of expectations of $266m.

BlackBerry, which has largely transitioned from making smartphones and tablets to developing security software, also cut the top end of its full-year revenue growth guidance from between 23% and 27% to between 23% and 25%.

The downgrade came as BlackBerry's internet of things business fell short of estimates for a second successive quarter, with revenue down 5% to $134m against average analyst expectations of $150m.

The Cylance business, which Blackberry snapped up for $1.4bn in April, contributed $35m to revenue, while software and services revenue increased by 24% to $239m even as the company said it faced intense competition.

John Chen, executive chairman and chief executive of BlackBerry, said the group's QNX, Cylance and Licensing businesses executed at or better than expectations and that the period had seen increased investment in sales and product development to support future growth.

At 1350 BST, the shares were down 14% in pre-market trade at $6.45.