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What: Shares of BlackBerry (NYSE:BB) surged today, up 11% by 11:45 a.m. EST, after the company reported third-quarter earnings that topped market expectations. The strong results were driven by continued execution on the software and services front, in addition to better-than-expected hardware sales.

So what: Adjusted revenue rose 14% sequentially to $557 million. That total included adjusted software and services revenue of $162 million, a strong 183% year-over-year increase. All of this translated into adjusted EBITDA of $114 million and an adjusted loss of $0.03 per share. The market was expecting sales of $489 million and an adjusted loss of $0.14 per share, so you can see why investors are pleased with the results.

Now what: During the quarter, BlackBerry completed its acquisitions of AtHoc and Good Technology, and finished the quarter with $2.7 billion in cash and equivalents. The company also launched its PRIV phone last month, its first full-fledged Android device that marks a significant strategic departure.

PRIV will emphasize security while joining the official Android camp (and its 1.6 million apps). The PRIV has reportedly been selling well, with inventory selling out at major retailers, although it's unclear what kind of inventory levels BlackBerry was building. BlackBerry declined to provide a specific figure, but did say that the company recognized revenue on 700,000 total devices. That's fewer devices than it sold a year ago, but average selling prices are rising as BlackBerry focuses on higher-end hardware.

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.