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BlackBerry posts 3Q loss of US$4.4B
TORONTO—BlackBerry reported a massive US$4.4 billion loss in the third quarter and 56 per cent drop in revenue in its first results under new chairman and interim chief executive John Chen who hopes to make the company profitable again by 2016. BlackBerry also announced Friday it is entering into a five-year partnership with Foxconn, the Taiwanese company that assembles products in vast factories in China. Foxconn will jointly design and manufacture some new BlackBerry devices and manage the inventory of them.
“I’m hoping we never have to have a conversation going forward about inventory write downs,” Chen said on a conference call with analysts. Chen said he thinks BlackBerry “has a really good shot” of turning a profit in 2016 and said management will try its best to achieve that. Chen later laughed when an analyst wished him “best of luck.” The former Sybase CEO is credited with turning around Sybase, a data company that was sold to SAP.
He said turning BlackBerry around would be his most “complicated’ challenge but said the company has US$3.3 billion in cash and that will “definitely allow us to engineer our turnaround.” “We are no longer worried about whether we’re going to be around,” Chen said. BlackBerry reported revenue of US$1.2 billion, down from US$2.7 billion in the same quarter last year.
Chen has said the company “is very much alive” but is putting more emphasis on Blackberry’s software business than its hardware business. He said first Foxconn’s BlackBerry phones will be released in March or April and will be built in Indonesia. “I’ll be happy to have a breakeven or a low margin device business and then have that help us to monetise software,” Chen said.
BlackBerry said it sold just 1.9 million smartphones in the quarter compared to 3.7 million in the previous quarter and said most of them were old BlackBerry 7 devices. This year’s launch of BlackBerry 10, its revamped operating system, and fancier devices—the touchscreen Z10 and Q10 for keyboard loyalists—was supposed to rejuvenate the brand and lure customers. But the much-delayed phones failed to turn the company around and have led to a billion dollar loss last quarter and a multibillion loss in the third quarter.
BlackBerry’s net loss amounted to US$8.37 per share in the latest quarter. Its adjusted loss from continuing operations, which excludes restructuring and other items, was US$354 million, or 67 cents per share.
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