9:30 AM – Recent years have been downhill for BlackBerry. For the fiscal third-quarter results, analysts expected BlackBerry to post a loss of -$0.44 per share on $1.596 billion in revenue, but looking at the report published on Friday, it seems things have been much worse for BlackBerry than we originally thought.
Instead of the original expectation, the company posted a mind-blowing loss to -$0.67 per share on $1.2 billion in revenue. Last year at the same time, the company posted a loss of -$0.22 per share on sales totaling $2.7 billion, however this year, it’s much worse. This doesn’t come as a surprise though since the company has struggled even more in 2013. Additionally, there was a massive write-down, as well as other one-time charges, and BlackBerry’s Q3 loss totaled to $4.4 billion, or -$8.37 per share.
The report goes on to say that BlackBerry shipped 1.9 million devices during the November quarter. Last year at the same time, the company shipped 6.9 million devices, so it’s a major loss of business. Also, it’s worth noting that BlackBerry no longer reports subscriber figures.
There is somewhat good news. BlackBerry announced a 5-year deal with Chinese manufacturer Foxconn. In this deal, both companies would co-develop future devices. While BlackBerry creates the devices and remains owner of the IP, Foxconn will build them. Basically, the company will most likely start focusing on the development markets more than the high-end market. BlackBerry’s BBM service flourishes in developing markets, so it’s good to see them turning their attention to more important places. This deal will start going into effect early 2014.
Here’s a statement from Chen included in the report:
[quote]“This partnership demonstrates BlackBerry’s commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions,” said CEO John Chen. “Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively.”[/quote]
As a consequence of the report, BlackBerry’s shares dropped 7% and continues to drop this morning. While the company reshapes its management and focus, it’s safe to say that BlackBerry has reached its bottom end. Now we have to see how CEO John Chen reshapes the company for a bright future.