The closing year has been calamitous for BlackBerry Ltd. which reported an incredible net loss of US$4.4 billion today.
The Canadian phone maker’s revenue was $1.2 billion down 56 per cent from the same quarter last year.
BlackBerry’s adjusted loss from continuing operations was $354 million, or 67 cents per share — 23 cents below analyst estimates.
However BlackBerry’s (TSE: BB) newly installed chief executive officer remains optimistic that a new strategy will turn the struggling company around and announced a five-year partnership with a Taiwanese electronics company to develop new smart phones.
“With the operational and organizational changes we have announced, BlackBerry has established a clear road map that will allow it to target a return to improved financial performance in the coming year,” John Chen said in a release today. “While our Enterprise Services, Messaging and QNX Embedded businesses are already well-positioned to compete in their markets, the most immediate challenge for the Company is how to transition the Devices operations to a more profitable business model.”
Blackberry also signed a five-year strategic partnership with Foxconn Technology Group (TPE: 2354) to create devices for Indonesia and other fast-growing markets next year.
Foxconn is Taiwanese electronics contract manufacturing company.
Chen said the partnership will limit BlackBerry’s exposure to risks associated with managing inventory.
Under the partnership, Foxconn will manufacture products for BlackBerry at facilities in Indonesia and Mexico. BlackBerry will own all of its intellectual property and perform product assurance on devices through Foxconn.
A company statement released today mentioned the following highlights for the third quarter:
- Company begins transition to operating unit structure: Enterprise Services, Messaging, QNX Embedded business and the devices business
- New organizational structure to drive greater focus on services and software, while establishing a more efficient business model for the devices business
- Enterprise Services: Company sees increasing penetration of BlackBerry Enterprise Service 10 (BES10) with over 30,000 commercial and test servers installed to date, up from 25,000 in September 2013; Company remains a mobile device management leader with global enterprise customer base exceeding 80,000
- Messaging: Over 40 million newly registered iOS/Android users in the last 60 days; more than a dozen Android OEMs to preload BBM, including most recently LG; over 250,000 BBM
- Channels created by global user base since launch of BBM Channels on BlackBerry,including large brands such as Coke Indonesia and USA Today; BBM is the most secure mobile messaging service for use in regulated enterprises
- QNX Embedded Business: QNX to unveil new technology in automotive and cloud services at the 2014 International Consumer Electronics Show in January Devices
- BlackBerry strikes joint device development and manufacturing agreement with Foxconn; initial focus of partnership to be development of a consumer smartphone for Indonesia and other fast-growing markets in early 2014
- Revenue for the third quarter was approximately $1.2 billion, compared to $1.6 billion in the previous quarter
- BlackBerry reported sales of approximately 1.9 million smartphones in the third quarter, compared to 3.7 million smartphones in the previous quarter
- BlackBerry took primarily non-cash, pre-tax charges of $4.6 billion associated with long-lived assets, inventory and supply commitments, and previously announced restructuring and strategic review process
- GAAP loss from continuing operations was $4.4 billion, or $8.37 per share diluted, compared with a GAAP loss from continuing operations of $965 million, or $1.84 per share diluted, in the prior quarter
- Adjusted loss from continuing operations for the third quarter, excluding charges, was $354 million, or $0.67 per share diluted, compared with adjusted loss from continuing operations of $248 million, or $0.47 per share diluted, in the prior quarter
- Cash and investments balance of $3.2 billion; cash used in operations of $77 million