Euan Rocha and Alastair Sharp Toronto
BlackBerry’s total market value plunged by more than a quarter on Friday after the smartphone maker reported dismal quarterly results, prompting ever-deeper scepticism about a long-promised turnaround.
BlackBerry, which has struggled to claw back market share from the likes of Apple’s iPhone, Samsung Electronics’ Galaxy phones and other devices powered by Google’s Android operating system, reported a loss in the fiscal first quarter to June, and sales of its make-or-break new line of devices were softer than had been expected.
The company also said it would not make an operating profit in the current quarter.
Shares of BlackBerry, which changed its name from Research in Motion (RIM), closed 27.8 percent lower at $10.46 (R103) on the Nasdaq on Friday. Shares touched levels last seen in November last year, before the launch of the new range of smartphones early this year.
Some analysts believe that potential buyers may take a look at BlackBerry, given assets that include a wealth of valuable patents.
“If you look at the asset base that they have at their disposal, it’s formidable,” said John Jackson, a research vice-president for IDC. “So there are any number of companies that might have an interest in RIM’s assets if indeed it’s in play.”
Macquarie analyst Kevin Smithen cut his rating on BlackBerry to underperform from neutral and said he saw a break-up or sale of the company as a likely end game.
BlackBerry invented the concept of on-the-go e-mail more than a decade ago with clunky little devices with a mini-keyboard.
The gadgets allowed the company to corner the lucrative market serving business and legal professionals, as well as government workers.
But many in that market are now moving to other devices, leaving BlackBerry struggling to make its mark both at the top and the bottom of a competitive smartphone market.
BlackBerry said it shipped 6.8 million smartphones in the quarter, including about 2.7 million BB10 devices. This fell shy of market expectations of more than 3 million shipments for its new Z10 and Q10 smartphones. The first-quarter results and revenue figures also missed analyst estimates. By comparison, Apple shipped 37.4 million iPhones in the quarter to March, up from 35.1 million a year ago.
Chief executive Thorsten Heins said it would take “at least a few quarters” to turn BlackBerry around and he insisted the company would stay the course. “We’re not sitting here devastated or destroyed,” Heins said after the results came out. “In my view, given where we are with the portfolio and the roll-out, it actually was a good quarter.”
On the bright side, BlackBerry’s cash position rose to $3.1 billion as of June 1, up about $200 million from the final quarter of the last fiscal year. The company has no debt.
Excluding one-time items, BlackBerry reported a loss from continuing operations of $67m on revenue of $3.1bn. It said Venezuelan foreign exchange regulations had knocked about 10c a share off the bottom line. Analysts had expected a profit of 6c a share, on revenue of $3.36bn.
The net loss was $84m, down from $518m a year ago.
But BlackBerry also reported a steep decline in revenue from its high-margin service business, the fees BlackBerry collects for providing data and security services to customers. – Reuters