BlackBerry's fourth-quarter revenues plunged 64% vs. last year. The company lost $42 million in the quarter, or $.08 a share -- news that prompted a 7% jump in the company's stock price in premarket trading.
But why?
The earnings were actually better than Wall Street's forecast of a $.56 loss, though it had predicted higher revenues -- $1.13 billion compared to the actual $976 million.
BlackBerry's new CEO, John Chen, says the results show the company has done a good job cutting expenses: "I am very pleased with our progress and execution in fiscal Q4 against the strategy we laid out three months ago. We have significantly streamlined operations, allowing us to reach our expense reduction target one quarter ahead of schedule," Chen said in a press release. "BlackBerry is on sounder financial footing today with a path to returning to growth and profitability."
As Chen explained, BlackBerry's overall business may be contracting, but the company is streamlining its operations. In Q4, BlackBerry's gross margin rose 43% from 34% in the prior quarter. Channel inventory also fell 30%. The company is predicting it will be at break-even cash flow by the end of fiscal 2015, one year from now.