BLACKBERRY LTD. $12 - Toronto symbol BB

p>BLACKBERRY LTD. $12 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 528.8 million; Market cap: $6.3 billion; Price-to-sales ratio: 1.9; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) is best known for its BlackBerry smartphones. However, competition from Apple’s iPhone and Android-powered devices has cut the number of BlackBerry users worldwide to 37 million from 85 million in 2013. (All amounts except share price and market cap in U.S. dollars.) The company also earns fees on software it installs on its clients’ email servers. These programs let its businesses and government clients manage their employees’ phones and encrypt sensitive data.

In response to its shrinking smartphone sales, BlackBerry has cut jobs and sold surplus real estate. If you exclude unusual items, the company lost $45 million, or $0.09 a share, in its 2015 fiscal year, which ended February 28, 2015. However, that’s a big improvement over its 2014 loss of $711 million, or $1.35 a share.

Revenue fell 51.0%, to $3.3 billion from $6.8 billion. In fiscal 2015, 49% of the company’s revenue came from communication services, 43% from hardware sales, 7% from software and 1% from other products.

BlackBerry ended fiscal 2015 with cash of $3.3 billion, or $6.18 a share. Its long-term debt of $1.7 billion is equal to 34% of its market cap. The company recently launched the latest version of its server software, BlackBerry Enterprise Server 12. Unlike previous editions, this version supports a variety of mobile devices in addition to BlackBerry smartphones. The company hopes this product will help double its annual software revenue, to $600 million, in fiscal 2016.

The company’s focus on security software, as well as new devices that appeal to its traditional clients, strengthens its prospects. But the stock will remain highly volatile until its revenues improve.

BlackBerry is still a hold, but only for highly aggressive investors.

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