UPDATE 4-BlackBerry posts surprise profit, but subscribers slip

Thu Mar 28, 2013 1:44pm EDT
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* BlackBerry sold about 1 million new Z10 devices in quarter

* Expects to report break-even results in current quarter

* Says 55 pct of Z10 buyers are coming from other platforms

* Shares up 2.3 percent at midday (Adds comments from CEO and analysts, details on results)

By Euan Rocha

TORONTO, March 28 (Reuters) - BlackBerry reported a surprise quarterly profit on Thursday after shipping 1 million new Z10 smartphones, but the Canadian company still fell short of convincing markets that its turnaround plan is already a runaway success.

BlackBerry shares were up 2.3 percent at midday on the Nasdaq, down from their 10 percent gain immediately after the results came out.

Expressing lingering doubts, some analysts focused on a decline in the company's subscriber base, a potential threat to its long-term growth prospects and turnaround plans. Others, however, zeroed in on strong sales of the new touchscreen Z10 device, which BlackBerry started rolling out at the end of January.

"I think the one million units is a nice start," said Morningstar analyst Brian Colello. "I think the encouraging thing is that BlackBerry was still able to sell a good portion of older models and generate solid service revenue during the transition. I think that will be important in terms of cash balance and profitability."   Continued...