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Results for BlackBerry (NASDAQ:BBRY) are in. For the Fourth Quarter year-end fiscal 2013 results the company reported as follows:

Q4 Highlights:

• Revenue of $2.7 billion

• GAAP income from continuing operations of $94 million, or $0.18 per share diluted

• Adjusted income from continuing operations of $114 million, or $0.22 per share diluted

• Gross margin of 40%driven by higher average selling prices and hardware margins

• Shipments of 6 million smartphones, including approximately 1 million BlackBerry 10 units

• Subscriber base of approximately 76 million

• Cash flow from operations of $219 million, cash and investments balance of $2.9 billion

First of all revenue for Q4 was $2.7 billion, up 2% sequentially over Q3. That alone tells us that the company is on the right track. However, we have to keep in mind that many people put off buying a BlackBerry, waiting for the Z10 to come along. So actually a 2% increase in revenue is better than it seems.

Second, the report only includes about 30 days of sales for the Z10. I am not sure what the consensus for Z10 sales was, but I think one million Z10 sales in about 30 days is a very good number, given that those 30 days only included limited international availability.

Please remember that these numbers do not include any U.S. sales. And while the U.S. is currently not BlackBerry's biggest market, I think that will change in 2013. My take is that the U.S. will exceed Europe as BlackBerry's number one market before the year is over.

GAAP income for the quarter was $94 million or $0.18 cents per share. This is much better than what the Street expected. Analysts surveyed by FactSet had been expecting a loss of 31 cents. So in my book this is a very big upside surprise. In fact, the surprise is even greater, if as Bloomberg says, of the 45 analysts who track the company, only 6 have a buy rating on it.

Total cash, cash equivalents, short-term and long-term investments was approximately $2.9 billion as of March 2, 2013. Is this a surprise also? Yes it is, because there were many analysts that thought BlackBerry would be on a cash burn marathon, building up inventory and paying for marketing expenses. Well I am sorry to disappoint everyone, but that didn't happen. The cash position of the company is even better than the previous quarter.

One issue that I have always been worried about is if BlackBerry would have to write down its old inventory of phones. But from what it seems, this is not an issue. The company seems to be selling older models with no problem. Selling 5 million older model handsets will provide a good cushion for the company in its transition to BB10. This was a very big concern of mine in the past and I am glad to see I was wrong.

As for subscribers, a million here and a million there is no big deal as far as I'm concerned. Current subscribers are off on a q-o-q basis, but when you think of it, the number is same as it was about one year ago. Below is a list of the subscribers per quarter.

- March 2, 2013: 76 million

- Dec. 1, 2012: 79 million

- Sept. 1, 2012: 80 million

- June 2, 2012: 78 million

- March 3, 2012: 77 million

Bottom line

The quarter was a whole lot better than what anyone imagined as far as profitability is concerned. I think sales of the Z10 were good and I think next quarter will be much better, as sales on a worldwide basis kick in.

According to the company, more that 50% of new users are coming over from other platforms. If we assume that many old BlackBerry users will also upgrade, I think we will be surprised by the sales numbers in future quarters.

BlackBerry reported gross margins of 40 percent, up from 34 percent a year earlier. The company credited higher average selling prices and higher margins for devices. I cannot stress how important this is and how it will add to the bottom line in the future.

The most important thing to remember is that this company is not going out of business as many thought. As far as I'm concerned, this is the most important issue to keep in mind, because analysts had this company for dead. I think the stock is still not reflecting this comeback.

Finally, please remember I have never said BlackBerry would become Apple (NASDAQ:AAPL). This is a niche company and will remain one for some time. If the BB10 platform becomes extremely popular at some point in the future is an added extra. I never encompassed this element in the scope of my analysis all these months.

My thesis from the very start has been that shareholders will make money simply if this company would come back from the dead. So far it has done much more than that. And even if this stock has doubled since I first recommended it, I think it can give much more to shareholders in the longer term.

So I will set a price target of $30 per share for the next 12-18 month period. Remember this company is only worth about $7 billion, with a very good balance sheet and with very conservative management, judging by the cash management they have been doing all these months.

With the company completing the transition to BB10 over the next several quarters and with the introduction of lower priced handsets over the next several months, I think the BB10 platform will solidify its presence in the smartphone space. The company is already a niche player, with the possibility of becoming a mainstream player. And if that happens, then even my $30 price target will be conservative.

Lastly, now that we have a first glimpse of sales, the solid balance sheet, the successful launch of the Z10, evidence that the BB10 transformation will be successful and the fact that this brand is slowly coming back from the dead, my question to short sellers is, do you feel lucky?

Source: BlackBerry: Do Short Sellers Feel Lucky?