BlackBerry confirms the worst: Revenues crash 49% in one quarter as losses nearly hit $US1 billion
Monday, September 30, 2013/
BlackBerry has formally released its results for the second fiscal quarter of 2014, confirming the company’s results were as bad as many analysts had feared.
The company reported just $US1.6 billion in revenues for the quarter, down 45% year-on-year and 49% quarter-on-quarter.
The company revealed the revenue breakdown was 49% for hardware, 46% for software and services (including Blackberry Enterprise Server and BlackBerry Messenger) and 5% for software and other sources.
The company also confirmed weak sales of its BlackBerry 10 series of smartphones.
“During the second quarter the company recognised hardware revenue on approximately 3.7 million BlackBerry smartphones,” the company states.
“Most of the units recognised are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognised until those devices are sold through to end customers.”
Total losses came in at $US965 million, including a massive $US934 million inventory writedown against unsold stock of the company’s Z10 smartphone.
In a statement, chief executive Thorsten Heins tries to put a brave face on the result, claiming an increase in BES subscriptions to 25,000 from 19,000 a year earlier.
“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” Heins says.
“While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10.”
News of the results came as The Globe and Mail published a 10-page feature article revealing boardroom battles between Heins and co-founder Mike Lazaridis over keyboards and strategy, and how flawed execution prevented the company from producing the iPhone killer requested by US carrier Verizon.
Last week, the embattled Canadian smartphone maker signed a letter of intent for a $US4.7 billion takeover bid by led by investment tycoon Prem Watsa.