Blackberry interim CEO John Chen expects the smartphone company to become profitable by 2016, adding that the new partnership with Foxconn will help the handset division make money.
"[We] need to see the growth in FY 2016...it cannot be just from cost and containment and so forth, although we seem to be doing pretty (well) there," Chen told CNBC in an exclusive interview with CNBC on Friday.
The company struck a five-year partnership with Taiwan-based manufacturer Foxconn Technology to develop and manufacture handsets, starting with a lower-end device built for Indonesia and other emerging markets. Foxconn is also one of iPhone maker Apple's main suppliers.
(Read more: iPhone market share quadruples in China)
Shares of the stock spiked nearly 17 percent as investors welcomed the deal, despite another dismal quarterly report from the smatphone maker.