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BlackBerry continues skid, company posts $238 million quarterly loss
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MacNN Staff
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Apr 1, 2016, 03:06 PM
Canadian phone manufacturer BlackBerry continues to slowly bleed to death. Once again, the company has posted a massive loss, posting a quarterly loss of $238 million on revenue of $464 million, after eking out a small profit in the year ago quarter. Notably, CEO John Chen claimed in a post-earnings announcement interview that the company would have to consider shedding itself of its smartphone division, should things not turn around this year for the department.

Purchase orders with contract manufacturers totaled approximately $162 million at the end of the fourth quarter, compared to $298 million at the end of the third quarter and down from $394 million in the year ago quarter. Revenue breakdown for the quarter was approximately 32 percent for software and services, 29 percent for service access fees (SAF), and 39 percent for hardware and other revenue.
"We have clearly gained traction and market share in enterprise software. We more than doubled our software and licensing revenue in Q4 and exceeded our target of $500 million for the full year. Looking to FY 2017, our strategy is on track and our growth engines are in place to continue to generate above market growth in software and achieve our profitability objectives," said Chen. The CEO also claims that BlackBerry "made progress on the key elements of our strategy, which are to grow software faster than the mobility software market, achieve device profitability and generate positive free cash flow."

BlackBerry sold 600,000 devices in the quarter, with CEO Chen claiming three million sales a year at a $300 average selling price would be sufficient for profitability. In a investor's conference call last year, Chen previously noted that five million sales a year would be needed. The executive gave no reason for the difference in numbers this year to the end of last.

In an interview with CNBC television after the financial results were released, Chen said that it was possible BlackBerry would stop producing smartphones this year. The CEO said regarding the continued losses by the hardware division of the company that "if by September I couldn't find a way to get there ... then I need to seriously consider being a software company only."

The company noted $527 million in software and licensing revenue, where it expected $500 million. It is pinning its hopes on an expected 30 percent growth in the division in the new fiscal year.

Wall Street is highly negative about the latest financial results. The stock has fallen to $7.38, down 8.78 percent on the day, with the majority of the losses taking place after the earnings announcement. Charter Equity analyst Ed Snyder said that "BlackBerry is slowly atrophying. Their big bank account allows them to slow things down but not change the direction."
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Apr 1, 2016, 03:47 PM
This is kind of reminding me the Apple from the old day.... until Steve Jobs came on board. This company needs someone with visionary and passion.
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Apr 2, 2016, 02:34 AM
@CoffeeTime John Chen has saved multiple companies from disaster. Most recently Sybase (subsequently sold at a big profit to SAP). Chen was on the same board as Steve Jobs at Disney. He knows what it takes.

If Chen can't save Blackberry, quite frankly, it can't be saved.
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