BlackBerry revenue tumbles
Company’s finances fall more than expected, adjusted loss bigger than estimates
WATERLOO — BlackBerry missed already low expectations on Friday as the technology company released financial results that showed it’s still struggling to turn around its business.
The Canadian smartphone maker reported a profit of US$51 million for the three months ended Aug. 29, which was an improvement on the year-earlier net loss of US$207 million, and positive cash flow.
But it fell short of expectations with an adjusted loss of US$66 million or 13 cents per share — deeper than the nine cents per share that had been estimated.
Revenue for the quarter dropped 46 per cent from a year ago to US$490 million, well below analyst estimates of US$611 million and the $658 million recorded by BlackBerry in the previous quarter that ended in May.
“I’m not satisfied (with) ... where we are in the overall revenue and profitability, especially the performance of our handset business,” chief executive John Chen told analysts during a conference call.
BlackBerry also revealed plans to release the BlackBerry Priv as its first smartphone to run on the Android operating system. The new phone, which is named after the privacy of its high-level security technology, will arrive before the end of this year in major markets.
Despite calls from some analysts for BlackBerry to scrap its own BlackBerry 10 operating system, the company said it doesn’t plan to make those sweeping changes — at least for now.
“There is a very loyal base in BB10, especially the government, and some highly regulated industry customers, so we will have to see whether we can make money on that base,” Chen said.
“If our plan of doing the BlackBerry-Android type of implementation works well, and the security side of the equation is well accepted by the government and this space, of course we could then replace or merge them.”
Whether introducing Google’s Android operating system into the mix will improve sales of BlackBerry phones remains to be seen.
During the second quarter, BlackBerry sales extended their decline, falling to 800,000 units around the world, a slide from the 1.1 million phones sold in the company’s first quarter.
Chen has focused on reworking BlackBerry’s operations since he joined in 2013, with tight cost management and cheaper smartphone production being two major objectives.
Strengthening software licensing and services revenues has been part of Chen’s priorities. He said revenue for that part of its business grew 19 per cent to $74 million during the quarter.