BlackBerry Takes A Knock As Cybersecurity Revenue Drop Clouds Automotive Demand

Canada's BlackBerry Ltd on Tuesday reported a fall in cybersecurity revenue for the second quarter, as customers reined in spending due to an uncertain macroeconomic environment, sending its shares down about 3% in extended trading.

The company has also been facing tough competition from Microsoft Corp, Citrix Systems and International Business Machines in the security software segment, with revenue in the unit falling 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-on-year.

However, revenue at the company's Internet of things (IoT) unit, which includes the QNX software for automotive customers, rose about 28% to $51 million as it signed up more customers.

BlackBerry's QNX software is now embedded in over 215 million vehicles worldwide, helped by surging demand for electric vehicles and connected-car technologies.The company recently added global carmakers such as Ford Motor, General Motors, Hyundai Motor, to its already strong client list of BMW, Honda Motor , Mercedes-Benz and Toyota Motor.

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

Total revenue fell 4% to $168 million for the quarter ended Aug. 31, compared with 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 loss of 7 cents.