News

 

BlackBerry loses $4.4 billion in third quarter

Struggling smartphone company's revenue is down 56% over the same time last year

BlackBerry lost a whopping US$4.4-billion in the third quarter as it reported that its newest smartphones, once touted as the way it would reclaim a competitive position, are hardly selling at all.

The Waterloo, Ont.-based company said more than 74 per cent of the 4.3 million BlackBerry devices that landed in user's hands during the quarter were its older BlackBerry 7 models, not the new BlackBerry 10 devices.

Those poor sales weighed on BlackBerry's revenue which was US$1.2 billion, down 56 per cent from a year ago when it didn't have new smartphone models on the market. It also was $400 million lower than analyst estimates compiled by Thomson Reuters.

BlackBerry, which is in the midst of significant changes to how it operates, also recorded a number of items related to its restructuring efforts, and the company managed to increase its cash holdings to $3.2 billion at the end of November.

Adjusted losses from continuing operations, which filter out various expenses like restructuring costs, were US$354 million, or 67 cents per share -- also 23 cents below analyst estimates.

The details come as BlackBerry also announced plans to shift much of it hardware development to Chinese electronics maker Foxconn under a five-year agreement will begin with manufacturing a smartphone for Indonesia early next year.

It's one of the many changes being made at BlackBerry under the leadership of chairman and interim CEO John Chen as he tries to reshape the struggling company.

BlackBerry said Foxconn will help develop new models and manage the inventory with operations based in Mexico and Indonesia.

In pre-market trade, BlackBerry's battered shares fell 45 cents or 7.2 per cent to US$5.80 after the earnings report.

A year ago, BlackBerry had a small profit of US$14 million, or three cents per share, under standard accounting and US$2.7 billion of revenue. Analysts expected BlackBerry adjusted loss would be 44 cents per share and its revenue would be about US$1.6 billion.

Since Chen joined BlackBerry last month, replacing BlackBerry CEO Thorsten Heins, he has started a dramatic overhaul of its executive ranks and begun fresh efforts to turn around the company.

``With the operational and organizational changes we have announced, BlackBerry has established a clear roadmap that will allow it to target a return to improved financial performance in the coming year,'' Chen said in a statement.

He said parts of BlackBerry's business, including its enterprise services for organizations and its messaging products, are in good shape. He said the most immediate challenge is to improve its devices operations.

``We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year,'' Chen said.

``However, the company is financially strong, has a broad and trusted product portfolio to work with, a talented employee base and a new leadership team dedicated to implementing our new roadmap.''

Chen says the partnership with Foxconn demonstrates BlackBerry's commitment to making devices over the long term.

There has been speculation that BlackBerry could get out of the device business in light of intense competition from Apple, Samsung and other smartphone makers.
For many people, Foxconn is best known as one of Apple's main suppliers.

``BlackBerry is an iconic brand with great technology and a loyal international fan base,'' said Terry Gou, Foxconn's founder and chairman.

``We are pleased to be working with BlackBerry as it positions itself for future growth and we look forward to a successful strategic partnership in which Foxconn will jointly develop and manufacture new BlackBerry devices in both Indonesia and Mexico for new and existing markets.''

Leave a comment:

showing all comments · Subscribe to comments
  1. Mike from the hinterland posted on 12/20/2013 08:11 AM
    Stick a fork in them there done like dinner. This is what happens when a company fails to innovate. Hopefully, new ownership will bring this around.
    1. Karl Burgin posted on 12/20/2013 10:12 AM
      @Mike from the hinterland You are unfortunately right- although I hope to God you're wrong about them being done. Never really used to appreciate BlackBerry until recently when I started using Z10, Its actually quite impressive, and the Z30 is supposed to be even better.
      I work with a guy who used to be at BlackBerry, but got let go due to layoffs. He says the marketing sucks, when compared to Android, and Apple. And my brother who works there under contract, says they still spend money buying stupid stuff (i.e. a multi-million dollar jet recently)- although they wanted to keep it hush-hush.

      This is a Nortel-in-the-making, that is very hard to watch.
  2. kar posted on 12/31/2013 12:25 PM
    I'm a multi-billion dollar highly-ranked player in this market, without debt, and my sales are down 50% over last year. How on Earth does that make me hopeless?
  3. Mark posted on 01/01/2014 06:35 AM
    In businesses like this you can not take your eye off the ball. This is Balsillie's fault. Just prior to RIM's downfall tumble this idiot was spending all his time in the public eye strutting around in tuxedos, going to parties, and looking for an NHL team. He clearly was preoccupied and dropped the ball. The competition took advantage of RIM's poor management and they have not been able to recover. Such a sad story of negligence. Share holders have every right to be pissed at this clown.
  4. Silvia Clarks posted on 01/01/2014 01:33 PM
    I get paid over $87 per hour working from home with 2 kids at home. I never thought I'd be able to do it but my best friend earns over 10k a month doing this and she convinced me to try. The potential with this is endless. Heres what I've been doing, www.Best96.com
    1. Angry Bill posted on 01/03/2014 01:23 PM
      @Silvia Clarks I find your ideas intriguing, and would like to subscribe to your newsletter.
  5. Angry Bill posted on 01/03/2014 01:27 PM
    Wanna know why the Android phones are doing so well right now?

    Because they went back to the drawing board when the iPhone was first released. Google was about to release its Android phone around the same time as the iPhone came out. They had the hardware, suppliers, everything all lined up. Then, Apple released the first iPhone. Google took one look at it, then looked at their phone, which suddenly looked "very 1990's". They scrapped it all, and went back to the drawing board.

    RIM did not. That's the difference.
showing all comments

Your GTA

Sign Up For Breaking News Alerts

Becoming a member only takes 60 seconds! Members get access to exclusive information and products that non-members do not, including concert ticket presales, trips, advance notice on upcoming entertainment events, movie screening passes, music giveaways and more!

Login with Facebook

Today's Poll

Today is Earth Day. Are you doing anything to green up your world?

Voting is restricted to one vote every 24 hour(s) VoteResults

Top Stories

Video

Facebook

Twitter