BlackBerry’s dismal results no surprise, boost shares
TORONTO — At least BlackBerry’s second quarter wasn’t any worse than expected.
The Waterloo, Ont.-based smartphone company had a US$965-million loss in the three months ended Aug. 31 and revenue plunged to US$1.6 billion, down 49 per cent from this year’s first quarter and 45 per cent from last year’s second quarter.
Bill Krehler, a technology analyst with Edward Jones, said the biggest take-away from BlackBerry’s secondquarter report on Friday was that the actual results were in line with the estimates issued by the company last week.
“We didn’t see any surprises, and I believe that the Street treated that with relief,” Krehler said.
After the report, BlackBerry shares moved up 10 cents to $8.32 on the Toronto Stock Exchange near midday.
On the Nasdaq, shares gained 11 cents to $8.06.
Part of the overall quarterly loss was a $934-million charge from unsold BlackBerry Z10 phones, the touchscreen device which hit shelves earlier this year and failed to catch fire with consumers.
The company recognized hardware revenue on about 3.7 million BlackBerry smartphones sold in the quarter, with “most” of the units being its older BlackBerry 7 devices.
The results also show BlackBerry drew down some of its cash reserves, considered a potential safety net. As of Aug. 31, BlackBerry had about US$2.6 billion of cash and investments, down half a billion dollars since May.
Its financial report was vague about what its cash was used for, saying the biggest chunk of it — about $268 million — went toward “intangible assets,” which is a general undefinable term for non-physical assets. About $136 million went to operations and another $112 million into capital spending.
On a per share basis, the adjusted loss was equal to 47 cents per share compared with analyst expectations of 48 cents per share, according to a survey by Thomson Reuters
“We are very disappointed with our operational and financial results this quarter,” said chief executive Thorsten Heins.
“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.”
Heins said BlackBerry is focused on completing its restructuring quickly in order to establish “a more focused and efficient company.”