BlackBerry “very disappointed” following $965M loss – Mobile World Live

BlackBerry “very disappointed” following $965M loss

27 SEP 2013
Thorsten Heins

BlackBerry confirmed its anticipated poor results for the quarter to 31 August 2013, with Thorsten Heins (pictured), the company’s CEO, stating: “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”.

“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. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company,” he continued.

The company reported a loss of $965 million, compared with a $235 million loss in the year-ago period, on revenue of $1.57 billion, down from $2.86 billion. This included a $934 million inventory charge related to its Z10 smartphone, and pre-tax restructuring charges of $72 million.

BlackBerry actually saw a $1.45 billion loss from continuing operations before tax, but then benefitted from a $473 million recovery of tax.

It ended the period with a cash and investment pot of $2.6 billion, down from $3.1 billion at the end of the prior quarter.

BlackBerry has cancelled its conference call for these results, but said it will provide additional detail in the near future.

The numbers are inline with guidance provided by the ailing smartphone maker last Friday. At that point, BlackBerry announced plans to cut 40 per cent of its workforce, and focus on enterprise and prosumer markets, in an effort to stop the rot.

In the meantime, it has signed a “letter of intent” with Fairfax Financial for a $4.7 billion deal which will see BlackBerry taken private, but there are still a number of wrinkles to be ironed out before the ink can dry.

Earlier this week, Financial Times said there were “new doubts” about whether the Fairfax deal would be completed, following concern from analysts.

Among the issues noted were that other partners in the consortium have not been identified, and that Fairfax itself has not committed any more cash than it already had – it currently owns around 10 per cent of BlackBerry.

With Fairfax itself not increasing its exposure through a deal, a Bernstein Research analyst warned that the deal could seem like “a last-chance rescue attempt for Fairfax’s [existing] stake”.

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Steve Costello

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