Monday 23 October 2017

BlackBerry reports deep loss, revenue drop, as warned

BlackBerry user President Obama
BlackBerry user President Obama

BlackBerry has reported a nearly $1bn quarterly loss, days after accepting its largest shareholder's tentative $4.7bn bid to take it out of the public eye.

BlackBerry, which had warned of the results on September 20, said its net loss for the second quarter ended on August 31 was $965m, or $1.84 a share, while revenue fell 45pc to $1.6 billion from a year earlier.

The loss included a pretax noncash charge of about $934m against inventory and supply commitments for its new Z10 phone.

The company, which is also planning to shed 4,500 jobs, or more than one-third of its workforce, as it shrinks to focus on corporate and government customers, said it would not host the typical post-results call for investors after signing a tentative $9-a-share agreement to be acquired by Fairfax Financial, its largest shareholder, on Monday.

The Waterloo, Ontario-based company's steep revenue decline - and mounting losses have revived fears that BlackBerry, once a high-flyer and pioneer in the smartphone sector, now faces an ignominious death.

"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," BlackBerry Chief Executive Officer Thorsten Heins said in the earnings statement.

BlackBerry said it sold 5.9 million mostly older-model phones in the quarter, but only recognized revenue from 3.7 million, given that many sales had already been booked. By contrast, Apple Inc said it had sold 9 million of its new iPhone 5c and 5s models in the three days after launch.

Shares of BlackBerry edged up less than 1pc to $8 in trading before the market opened.



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