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BlackBerry posts $670M quarterly loss, 500,000 device sales
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Jun 23, 2016, 03:08 PM
 
BlackBerry is continuing to hemorrhage money, after its latest financial results show it endured a net loss of $670 million for the most recent quarter. Revenue for the Canadian smartphone producer is also poor, pulling in just $400 million over the three-month period ending in May, a year-on-year drop of 39 percent, with the balance sheet hammered by a list of adjustments and a hefty asset impairment charge pushing it into the red.

According to the results, non-GAAP revenue totaled $424 million, with software and services making up $166 million of that figure. Reuters reports only 500,000 smartphones were sold by the company during the quarter, at an average selling price of $290, though it sold 600,000 devices in the previous quarter, and 800,000 in the one before that.

The gross margin was $226 million, with operating expenses knocking the company down to a non-GAAP operating income of $14 million. Among the charges that worked against the company were a long-lived asset impairment charge of $501 million, a $57 million goodwill impairment charge, $41 million in inventory write-down, $28 million for amortization of acquired intangibles, $12 million in stock compensation expenses, and $23 million in restructuring charges.

Despite the losses, the company still has a hefty bank balance. Total cash and equivalents, as well as investments, were valued at $2.5 billion at the end of May, though when taking into account the company's debt, the net cash balance for the end of the quarter was $1.3 billion.

CEO John Chen advised to investors that BlackBerry's top priority for this year is to make its devices business profitable, which it is attempting to do by using a partner to produce the hardware itself. "We are at a point where our business is extremely efficient and we no longer really are making any hardware, claims Chen during the investor call, continuing "We are really a hardware design house." Chen suggested during the last quarterly results that it would be profitable if it sold three million devices at an average price of $300. The company aims to make a decision on the devices business by September.
     
Makosuke
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Jun 23, 2016, 03:29 PM
 
"Despite the losses, the company still has a hefty bank balance. [...] net cash balance for the end of the quarter was $1.3 billion. "

...which at this quarter's burn rate would theoretically last another 3 quarters. Will probably be a lot longer without the charges, assuming most are one-time, but still not as big of a number as it looks when you're doing that badly.

"Chen suggested during the last quarterly results that it would be profitable if it sold three million devices at an average price of $300."

So since they've nailed the ASP, they just need to increase sales by a factor of six, instead of dropping by 20% every quarter.

I'm sure that's easy.
     
chimaera
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Jun 23, 2016, 03:36 PM
 
I used to root for BlackBerry, as a 3rd competitor to iOS / Android. But since word leaked they're selling all our messages to the cops, I don't really care anymore. They need to grow a pair and stand up for their customers' privacy.
     
Inkling
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Jun 23, 2016, 04:28 PM
 
Is there room for a third contender in the smartphone market? I draw a blank when in consider what it might be. Apple has the high-end walled garden. Android has the rest. Their website talks of enterprise and security, but the others are quickly covering that. Some of their smartphones have cute physical keyboards, but that's not enough. Only one option suggests hope. They might do like IBM and shift from hardware to services. If Blackberry listened to doctors and nurses, creating apps and communication channels that really would increase hospital productivity, they might do well. I've examined what the Apple/IBM partnership is doing. It's creating niggling to-do apps that administrators may love but hospital staff will hate. Blackberry should try to beat that with apps that run on Android and iOS.
Author of Untangling Tolkien and Chesterton on War and Peace
     
   
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