- With a lot of bad news priced in, BlackBerry (BBRY +13.6%) has shot higher following its FQ3 report, as investors applaud a Foxconn deal that (for now) will limit BlackBerry's in-house phone design work to a limited number of high-end enterprise devices. Talking to CNBC (video), John Chen asserts the deal will help BlackBerry become profitable by FY16 (ends Feb. '16).
- Chen: "The number one thing I noticed (as CEO) was that our handset volume was dropping and with that, our [fixed] cost was too high ... [Foxconn] has the ability to bring the cost down ... The focus of the overall company is shifting toward enterprise, government customers and software services."
- With BlackBerry expected to lose $1.37/share in FY14 and $1.10/share in FY15, a return to profitability in FY16 would represent a major turnaround.
- Also: On the CC (transcript), Chen stated BlackBerry is aiming to become "cash flow neutral from operations" in FY15, and expects "reasonably good revenue" from BBM around the FY16 timeframe.
- Short-covering is likely contributing to today's gains: 33% of the float was shorted as of Nov. 29.
- More on BlackBerry