MAN WITH A PLAN
As BlackBerry struggles with fallings revenues, CEO John Chen says main goal is to make smartphone business profitable again,
“We don’t want to run a business that drags into the bottom line.” JOHN CHEN BLACKBERRY CEO
BlackBerry Ltd.’s main goal this fiscal year is to make money from its smartphone business, chief executive officer John Chen told shareholders at the company’s annual general meeting in Waterloo Wednesday.
“We need to make that profitable . . . we have a plan for it,” Chen told a sometimes raucous meeting that saw one investor challenge executive compensation at BlackBerry and accuse management of “bleeding the company dry.”
Chen was compensated $85.7 million (U.S.) in 2014, his first year as CEO, with most in the form of restricted shares that vest over five years. His pay fell 96 per cent to $3.4 million (U.S.) in fiscal 2015.
“The device business must be profitable, because we don’t want to run a business that drags onto the bottom line,” Chen told the meeting. “We’ve got to get there this year.”
Chen said the world needs a secure Android smartphone, although he conceded that the company lacks carrier support in the U.S. and the resources to conduct blanket consumer marketing. One shareholder suggested the company place banner ads on porn sites to bridge the gap.
BlackBerry lost 19 cents (U.S) per share in its fiscal 2016 and saw its client base decline to 23 million as the company’s handsets fell out of favour amid the advance of Apple iOS and Samsung Android devices.
BlackBerry posted sales of $2.2 billion in its last fiscal year, the lowest level since 2006, while its shares have fallen 20 per cent in the past 12 months.
The company’s premium priced Android phone, the Priv, has failed to boost sales although software and services revenue jumped 106 per cent last quarter compared with the year-ago period.
Chen, who said the software turnaround is on track, has indicated the firm may release lower-priced Privs in coming months while the handset is already being heavily discounted by retailers.
Analysts are expecting the company to post another loss in its fiscal first quarter, ended May 31, when it reports results before the bell Thursday.
Sixteen analysts surveyed by Thomson Reuters estimated on average that Black- Berry will report a loss of $27 million or seven cents a share on top of a $238million net loss in its fourth quarter that was driven by restructuring and acquisition costs.