BlackBerry reports loss, revenue decline but says it’s improving


Despite the loss and drop in sales, Blackberry CEO John Chen offered reasons for optimism. (Mark Blinch/Reuters)
March 28

BlackBerry reported fourth-quarter declines in profit and revenue, but chief executive John Chen greeted the results with optimism.

“I am obviously extremely pleased with the Q4 results because it put us on the track and, if not, slightly ahead,” Chen said in a call with analysts Friday. “I’m very pleased with the fact that the company’s now back in execution mode.”

The Waterloo, Ontario, company’s fourth-quarter loss was smaller than expected, but it missed on revenue.

For the three months ended March 1, the smartphone maker reported a loss of $423 million, or 80 cents a share, compared with a profit of $98 million in the year-earlier quarter. Excluding one-time items, BlackBerry reported a loss of 8 cents a share.

Revenue was $976 million, down from $2.7 billion a year ago. It was the first time since the March quarter of 2007 that BlackBerry has reported quarterly revenue below $1 billion.

Analysts surveyed by Reuters had expected a loss of 55 cents a share on revenue of $1.1 billion.

Chen told analysts that BlackBerry had cut operating expenses, putting it “probably a quarter ahead of schedule at this point.”

Besides reducing costs, the company is also under pressure to return to profitability and show growth. It is aiming to be profitable in fiscal 2016.

“We just need to make sure we do it in a well-paced manner and don’t want to get too much ahead of ourselves,” Chen said.

He said near-term growth would probably come from software and services such as the company’s BBM messaging service. BBM has about 85 million monthly active users.

But the company has not given up on hardware. Chen said he is working to make BlackBerry’s handset business profitable and that the company would launch new products including the BlackBerry Classic, formerly known as the Q20.

The BlackBerry Classic features a keyboard, trackpad and a long battery life, Chen said. It is expected to be released in the fourth quarter of 2014. The phone is also bringing back buttons for “Menu,” “Back,” “Send” and “End.”

He also announced that, because of customer demand, the company would continue manufacturing BlackBerry Bold smartphones. The older-model device runs the BlackBerry 7 operating system and has been popular in emerging countries.

BlackBerry still has a long way to go.

Its smartphone sales continue to be crushed by the iPhone and Android devices, with BlackBerry sales accounting for less than 0.5 percent of U.S. smartphone sales during the fourth quarter of 2013.

“Cutting expenses buys the company more time,” said Colin Gillis, an analyst at BGC Partners. “The company has a clear plan that makes sense to us. The question is whether the broader market will show sustained (or increased) demand for the products and services, or if the changed mobile landscape is going to keep driving rotation away from the platform.”

— Los Angeles Times

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