BlackBerry takes a hit as falling cybersecurity revenues cloud auto demand

Sep 27 (Reuters) – Canada’s BlackBerry Ltd (BB.TO) on Tuesday reported lower cybersecurity revenue for the second quarter as customers curbed spending amid an uncertain macro environment, dragging down its shares down about 3% in extended trading.

The company also faced stiff competition from Microsoft Corp, Citrix Systems (CTXS.O) and International Business Machines (IBM.N) in the security software segment, with unit revenue down 7%. 5% to $111 million from a year ago.

The company said in an earnings call that cybersecurity segment revenue in the third quarter is expected to be flat year-over-year.

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However, revenue from the company’s Internet of Things (IoT) unit, which includes QNX software for automotive customers, rose about 28% to $51 million as it added more customers.

BlackBerry’s QNX software is now embedded in more than 215 million vehicles worldwide, helped by growing demand for electric vehicles and connected car technologies. The company recently added global automakers such as Ford Motor (FN), General Motors (GM.N), Hyundai Motor (005380.KS), to its already strong client list of BMW (BMWG.DE), Honda Motor (7267.T), Mercedes-Benz (MBGn.DE) and Toyota Motor (7203.T).

BlackBerry said in June that a deal to sell its patents primarily related to mobile devices, messaging and wireless networks for $600 million to a special-purpose vehicle had been delayed. Read more

Total revenue fell 4% to $168 million for the quarter ended Aug. 31, from a consensus estimate of $166.7 million, according to IBES data from Refinitiv.

Excluding items, the company posted a loss of 5 cents per share, narrower than analysts’ expectations of a 7-cent loss.

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Reporting by Akash Sriram in Bangalore; Editing by Sriraj Kalluvila and Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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