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A rash of data breaches, particularly at casino firms MGM Resorts (NYSE:MGM) International and Caesars (NASDAQ:CZR) Entertainment, helped boost demand for BlackBerry’s cybersecurity unit in the three months ended on Nov. 30.
The company posted a unexpected per-share profit of $0.01. Meanwhile, total sales during the period grew by 3.6% year-on-year to $175 million, with almost of two-thirds of this amount deriving from the cybersecurity division.
However, revenue at the segment is now seen at $83M to $89M in BlackBerry’s fiscal fourth quarter, lower than its prior guidance. In a call with analysts, Chief Executive Officer John Giamatteo said the forecast cut was primarily due to “the reassessment of the likelihood, size, and timing of some of the large government deals in the pipeline.”
Total revenue is also estimated to be between $150M to $159M, suggesting a quarter-on-quarter slowdown in sales.
The update comes after BlackBerry scrapped plans for an initial public offering of its Internet of Things (IoT) division earlier this month, although it is still aiming to separate the IoT and cybersecurity businesses into standalone entities.
Giamatteo added that work has commenced to “fully” split the units, as BlackBerry aims to “rightsize” its operations in a bid to bolster profitability.
“[W]e expect to further reduce operating cashflow usage in [the fourth quarter],” Giamatteo said.
