Midday Report: Breaking Down Blackberry's Earnings Report

Leon Neal/AFP/Getty ImagesA guest tries out a new touchscreen Z10 Blackberry device. Canadian-based Research in Motion changed its name to BlackBerry as it launched the BlackBerry 10, the new platform aimed at helping the firm regain traction in a market now dominated by rivals.
Produced by Drew Trachtenberg

Blackberry's (BBRY) earnings: the good, the bad and the open to interpretation.

Let's start with the good news: Blackberry surprised Wall Street with a solid quarterly profit, when analysts were expecting a loss. That profit of $98 million dollars was aided by a cost-cutting program.

Now the not so good: Revenue fell from a year ago, and the company continued to lose customers. It shed 3 million customers to end the quarter with 76 million subscribers.

Here's where it gets tricky. The key to the company's future lies with the success of its new Z10 and Q10 smartphones, and today's report is inconclusive on that score. It's just too soon to tell how well the new Blackberry is being received.

The quarter, which ended four weeks ago, included only a slice of early sales, as the Z10 was rolled out slowly in different markets. It went on sale in the UK in late January, in Canada a week later, and in some Asian markets in the following weeks. The company says it sold about 1 million of the new Z10s during the quarter.

But the rollout in the U.S. did not come until last week, after the quarter had ended. The Z10 went on sale at AT&T (T) stores last week, and at Verizon (VZ) stores today.

So the quarterly results don't tell us too much about the success of the Z10.

And the Q10, which has Blackberry's traditional keypad – not a touch-screen – won't be released for another few months.

Tech analysts have given generally positive reviews to the new Blackberry line, but the company faces much more intense competition than it did when it rolled out previous generations. Of course, there's the Apple (AAPL) iPhone, and Samsung's Galaxy has become the top-selling smartphone.

All of this has made for volatile trading in shares of Blackberry, previously known as Research in Motion. When the earnings news broke this morning, the company's stock shot higher in pre-market trades, but then turned lower. By late morning, it was up about 3%, trading at around $15 a share.

Over the past six months, the stock is up 88 percent. But back in 2008, it traded above $120 a share.

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