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Print 22 comment(s) - last by flyingpants1.. on Oct 2 at 12:53 AM

The company only raked in $1.6 billion in revenue for the fiscal quarter

BlackBerry keeps slipping further and further into the dark abyss that is the end of its life, and its second-quarter earnings further prove that point. 

For fiscal Q2 2014, BlackBerry reported only $1.6 billion in revenue, which represents a $2.9 billion drop from the year-ago quarter. Analysts expected nearly twice that amount before receiving a warning just last week.

The company had a Q2 net loss of $965 million, or $1.84 a share. It had predicted a loss of $950 million to $995 million prior to the earnings release. Overall, BlackBerry lost $248 million, or 47 cents a share (analysts forecast a loss of 49 cents a share). 

This leaves the Waterloo, Ontario-based company's cash pile at $2.6 billion at the end of the quarter, which is down from $3.1 billion.

To make matters worse, BlackBerry said it sold 5.9 million smartphones, but only recorded revenue on 3.7 million. Many were older BlackBerry devices. 

BlackBerry reported a total GAAP loss of $965 million from continuing operations, which was due to a writedown of nearly $1 billion thanks to unsold Z10 smartphones. The Z10 was released as BlackBerry's first flagship device in the BlackBerry 10 (BB10) line earlier this year. 

BlackBerry CEO Thorsten Heins wasn't pleased with the financial results of his company.


Blackberry Z10

"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," said Heins.

"While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."

It's no secret that BlackBerry has been struggling. The company was once a big player in mobile, but has hit rock bottom after failing to compete with Apple's iOS and Google's Android. In 2011, BlackBerry had 14 percent of the U.S. smartphone market, and now, it has less than 3 percent.

Earlier this week, BlackBerry signed a letter of intent agreeing to a sale of the company valued at $4.7 billion to a consortium led by its largest shareholder -- Fairfax Financial Holdings Ltd., which owns 10 percent of BlackBerry. This deal, which would be completed November 4 after a due diligence period, would ensure that BlackBerry goes private. Additionally, each shareholder would receive $9 per share in cash.   

BlackBerry employees are feeling the heat, too. The company said it will cut 4,500 jobs (as of March, BlackBerry had 12,700 employees).  

Source: Market Wired



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I don't come here for this crap...
By SAN-Man on 9/27/13, Rating: 0
RE: I don't come here for this crap...
By Motoman on 9/27/2013 12:39:26 PM , Rating: 2
...although I'm going to come in at a 1 rating because I'm replying to your -1, I feel the need to point out that BlackBerry just lost $965 million in their last quarter. They have $2.6 billion left.

At that rate, they will be bankrupt in less than 3 quarters. They're something like 7 or 8 months from being completely insolvent.

So...yeah. The end of BlackBerry's life is nigh. Whether you want to accept that fact or not.


By w8gaming on 9/27/2013 12:55:47 PM , Rating: 2
The loss of almost 1 billion is due to write off attributed to unsold excess inventory. Blackberry is not going to continue to make more of such devices to continue to suffer the loss. So it is difficult to forecast how much they will lose in the next quarter. It is a matter how they can bring the cost down to align with whatever business revenue they can have. I suppose there are companies which are locked into their services which in the short term will continue to require services from them. But Blackberry definitely will knows the clock is ticking as Microsoft will be the closest competitor that might take their enterprise business from them. Going private is a good move as the public investors can cash out now to avoid the risk of slipping further downward, or as least the best they can do for the investors at the moment.


RE: I don't come here for this crap...
By ritualm on 9/27/2013 1:17:09 PM , Rating: 2
The math is off, Motoman. The only way to know how much cash it's bleeding per quarter is to crunch the numbers from its financial statements. Losing $965-million in one quarter does not automatically mean it's paying that much during that time period to remain operational.

While I agree with your notion that BB is in trouble, I have doubts they're losing all of $965-million in cash and cash-equivalents. Many income statement items do not involve liquid assets but are counted towards the final income/loss amounts.


RE: I don't come here for this crap...
By Motoman on 9/27/2013 1:26:14 PM , Rating: 2
That's fine, but either way they're dying...fast.

No matter how you look at it, posting a loss of 1/3 of your reserves is absolutely horrific.


By Phoque on 9/30/2013 8:18:04 PM , Rating: 2
Well, I guess it's not much comfort, but that billion in loss, they still have it in phones they 'might' be able to sell to mitigate that loss to some extent.


RE: I don't come here for this crap...
By jimbojimbo on 9/27/2013 1:46:35 PM , Rating: 2
They may not even last 3 quarters since they may have to write off even more inventory in the coming months. With news like this it also decreases sales so it escalates the problem even further.
Too bad, it was a good run.


By BRB29 on 9/27/2013 2:04:46 PM , Rating: 1
I don't know what you're saying.

With the current rate, they'll last over 2 years. They already announced downsizing. They'll last for a long time if they downsize with the current available cash.

Remember, BB has practically no debt.


RE: I don't come here for this crap...
By BRB29 on 9/27/2013 1:50:35 PM , Rating: 2
No they didn't actually lose $965M

Excluding the Z10 writedown and restructuring costs, BlackBerry reported a loss of $248 million, or 47 cents a share.

Revenue fell 45 percent from a year earlier to $1.6 billion, and BlackBerry's cash pile - made up of cash and equivalents, short and long-term investments - fell by more than $500 million to $2.57 billion.

They are cutting 4,500 jobs and probably reducing infrastructure/assets. That is probably going to save them at least $100-$150M per quarter starting next quarter. They'll break even soon.

In fact, I would jump on board to buy at least 10k shares once they hit $5.

BB isn't going away permanently. They have much better prospect of recovering than AOL or myspace and both of them are still around.


By Chaser on 9/27/2013 7:15:47 PM , Rating: 2
quote:
In fact, I would jump on board to buy at least 10k shares once they hit $5.
Let us know how that goes for you.


By ritualm on 9/27/2013 8:16:01 PM , Rating: 2
quote:
In fact, I would jump on board to buy at least 10k shares once they hit $5.

Word of the unwise.

Meanwhile, my investor friends were laughing all the way to the bank with their short-selling and put options against BB.


RE: I don't come here for this crap...
By retrospooty on 9/27/2013 12:51:54 PM , Rating: 1
How is that not news? It's happening. Sure the sentence is somewhat dramatized, but really, it fits.

Blackberry is circling the drain. Getting its last nail in hte coffin. How exactly do you want it reported?


By ClownPuncher on 9/27/2013 12:59:06 PM , Rating: 2
At this point, it wouldn't matter if they released the best phone in the world at the best price ever.


By Flunk on 9/27/2013 12:55:16 PM , Rating: 5
You know what this site is like, if you don't like it there are plenty of others.

I personally read this site because the comments section tends to be entertaining.


By drycrust3 on 9/28/2013 3:47:57 PM , Rating: 2
Why isn't a recent statement by the CEO of a once Number 1 tech company is racing downhill towards the cliff of oblivion not news? Mind you, saying he is very disappointed with the sales of their latest phone is, or rather should be, a complete understatement. Yes, the sales are disappointing, but that is hardly surprising, the only surprise is they've managed to sell over $1B worth. Why? Because Blackberry isn't selling a smartphone to a business executive who has a mobile phone any more, nor have they for several years, they are trying to sell a smartphone to a business executive who has a high end smartphone that has apps and music and an internet connection and a browser and email and maps and streetviews and video and ... and a ton of things.
The secure email facilities that Blackberry have ... well, there are other companies that claim to provide encrypted email apps to both Android phones and iPhones. I don't know how good these are, and whether they are equal or better to what Blackberry offer, but I found one that at least looks better (http://www.loment.net/).
See that? The exact reasons why people needed Blackberry are now common place.
What would be better news is what he intends to do to bring the company back from the brink of oblivion ... and no, selling the company to a shareholder isn't what I'd call a good rescue plan.


Q10 was probably worse than the Z10
By BrgMx5 on 9/27/2013 2:16:32 PM , Rating: 2
I was looking at the Q10, but that price was just miles off.

I can't even imagine why they would price it that high.

If an iPhone 5s BOM is just $200, they could have priced the Q10 at $300 off contract to gain some sales volume, but it was just not meant to be.




By Samus on 9/28/2013 1:37:03 AM , Rating: 2
The Q10 is a better phone, but that swipe up gesture is a design flaw since the ridge at the bottom of the screen makes it difficult to do. I can't believe somebody sent it to manufacturing that way like Palm's oreo-cookie problem.


By flyingpants1 on 10/2/2013 12:51:00 AM , Rating: 2
Even the Q5 is priced ~$400. Not sure what's going on at RIM.


What I'd do if I were running BlackBerry
By BifurcatedBoat on 9/28/2013 11:09:43 AM , Rating: 2
Create a version of Android will all of their BlackBerry services integrated, focus on no-nonsense business-style phones that are very-well built.




By flyingpants1 on 10/2/2013 12:53:00 AM , Rating: 2
And how would that change anything? They'd just be in even more direct competition with Samsung and others.


migration costs
By niaaa on 9/27/2013 4:27:40 PM , Rating: 2
having to migrate to a new blackberry server is too costly for companies, they tend to prefer to switch to something more open that can adapt to lots of different devices.

also the Z10 and Q10 are too confusing for long time blackberry users, the interface is sheisse.




BBRY Falls
By henhill69 on 9/27/2013 4:46:02 PM , Rating: 2
Blackberry Q2 2014 as expected – Disappointing @ http://stks.co/gmyd




“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads














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