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"Finally, some good news for BlackBerry. The Canadian smartphone maker reported its earnings results for the first-quarter for fiscal year 2015 on Thursday.\nTo the surprise of many analysts, the company managed to report a small profit \u2014 $23 million (or $0.04 a share), thanks to accounting adjustments under GAAP (General Accepted Accounting Principles). Take those adjustments \u2014 which were non-cash changes \u2014 out of the equation, and the company reported a loss of $60 million or $0.11 a share) for the quarter.\nStill, even if you view BlackBerry's earnings as a net loss rather than a profit, the company is showing signs of a turnaround. CEO John Chen, who took over BlackBerry seven months ago, is effectively stemming the pattern of losses in revenue, handset sales and market perception that have plagued the beleaguered company for the past few years.\nThe high level financial stats:\n\nBlackBerry's cash and investment balance is now at $3.1 billion at the end of Q1 2014, up from $2.7 billion the prior quarter\nAdjusted gross margin is 48%, compared to 43% in Q4 2014\nRecognized revenue on 1.6 million BlackBerry phones\n2.6 million phones sold to customers; 1 million had previously been recognized/shipped in previous quarters\nRevenue of $966 million, down from $3.07 billion a year ago\n\nFocus in the U.S. is on enterprise\nDuring the company's earnings call, Chen made it clear that moving forward, the company's core focus is on the enterprise and \"regulated industries.\" BlackBerry devices are still popular with consumers outside of the United States, including Indonesia, but in North America, the focus is decidedly on the enterprise and services.\nLast year, Chen announced a partnership with Foxconn to deliver a new handset for the Indonesian market. That handset, the BlackBerry Z3, launched last month in Indonesia. It will be arriving in Vietnam and India in the coming weeks.\nThe phone is manufactured and designed by Foxconn and Foxconn also handles the inventory. BlackBerry's margin on each device is approximately 10%. \nChen says that for the hardware business to be profitable, he thinks the company needs to sell about 10 million devices a year. The company sold 2.6 million devices in Q1, but only recognized revenue on 1.6 million, as a result of poor inventory calculations and prior write-downs in previous quarters. If the company can continue to shift that many devices per quarter (assuming it has exhausted its old backchannel inventory), the company should be able to break even on hardware.\nBut Chen made it increasingly clear that the company is less interested in hardware. Instead, he sees the biggest growth opportunities in the mobile device management (MDM) space. BlackBerry has managed to make moves to gain momentum back against its competitors such as GOOD and Mobile Iron, according to Chen.\nThe company issued 1.2 million EZ Pass licenses for BES10, its MDM program that manages BlackBerry and non-BlackBerry devices, in the quarter. EZ Pass is a program that lets businesses trade in old BlackBerry OS or competitor MDM licenses in exchange for free management on BlackBerry's platform.\nThe free access will eventually turn into a paid model for devices, and Chen hopes to use EZ Pass and the BES10 ecosystem to upsell more services. BES12, the successor to BES10, is due later in the year.\nAs for consumer BlackBerry fans? The company is shifting its focus away from native BlackBerry development and leveraging the fact that BlackBerry 10 is compatible with many Android applications. On Wednesday, the company announced that it will ship its phones with Amazon's Appstore this fall in conjunction with BlackBerry 10.3.\nThe goal there is twofold. Firstly, it helps fix the application gaps that still exist in the BlackBerry platform. Apps such as Instagram, Netflix and Candy Crush will be available on BlackBerry devices.\nSecondly, according to Chen, it will relieve BlackBerry from having to focus on efforts of the consumer side of the business, allowing it to work on creating \"native\" solutions for the enterprise and productivity.\nBut can it work?\nAs Chen noted on the earnings call, there is still a lot of work left to be done to \"fix\" BlackBerry. It's also increasingly clear that the new BlackBerry that emerges from these turnaround strategies will be a different company than the one that existed even four years ago.\nAlthough it's important to laud Chen for his work thus far, it's worth questioning the end goal of his strategy. In past interviews, he has remained committed to the hardware market, seeing it as a necessary hook for the enterprise, but the volume of devices the company is moving each quarter has to be a concern. At some point, it's worth asking if the effort in devices is worth the result.\nIt's worth noting that although BlackBerry reported a paper profit, the company is still losing money. Its losses are falling fast, but the company is not yet in a position where it can claim to be fully profitable.\nStill, Chen should be congratulated for accomplishing what Palm was unable to do: transition its business into something sustainable. Even if that means the resulting company is smaller and more focused, at least BlackBerry is showing signs of staying in business.\nBlackBerry stock was up $0.92 (about 11%) to $9.20 at the time of this writing.\nHave something to add to this story? Share it in the comments."^^<http://www.w3.org/2001/XMLSchema#string>
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