By Alastair Sharp and Allison Martell
TORONTO, Sept 27 BlackBerry Ltd
reported a quarterly loss of nearly $1 billion on Friday, in
line with last week's warning, days after accepting its largest
shareholder's tentative $4.7 billion bid to take it out of the
BlackBerry, which had warned of poor results on Sept. 20,
said its net loss for the second quarter ended on Aug. 31 was
$965 million, or $1.84 a share. Revenue fell 45 percent to $1.6
billion from a year earlier.
The loss included a writedown of about $934 million for
unsold Z10 phones, a touchscreen model that the company had
hoped would reverse its fading fortunes. The phone has sold
badly with business and consumer customers alike.
"This write-off is very real," said Morningstar analyst
Brian Colello. "They bought a lot of inventory hoping to sell
it. The auditors were not convinced that BlackBerry can sell it
or sell it at prices that the company was hoping for. We see no
reason to be more optimistic than them."
Excluding the Z10 writedown and restructuring costs,
BlackBerry reported a loss of $248 million, or 47 cents a share.
The company plans to shed 4,500 jobs, or more than one-third
of its workforce, as it shrinks to focus on corporate and
government customers. It will not host the typical post-results
call for investors after signing a tentative $9-a-share
agreement to be acquired by a consortium led by Fairfax
Financial, its largest shareholder, on Monday.
The Waterloo, Ontario-based company's steep revenue decline
and mounting losses have revived fears that BlackBerry, a
pioneer in the smartphone sector, faces an ignominious death.
"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," Chief Executive Officer Thorsten Heins said in
the earnings statement.
BlackBerry said Heins was not available for an interview.
The company said it had sold 5.9 million mostly older-model
phones in the quarter but only recognized revenue from 3.7
million, given that many sales had already been booked. By
contrast, Apple Inc sold 9 million of its new iPhone 5c
and 5s models in the three days after launch.
Shares of BlackBerry rose 2 percent to $8.11 in trading
before the market opened. The stock remains far below Monday's
bid price, indicating doubts that the Fairfax deal would be
completed or a rival offer would emerge.
BlackBerry said last week it would no longer market its
devices to consumers, instead focusing on the professional users
that brought its first success and won the little devices the
moniker "Crackberry" for their addictive nature.
That retreat from the consumer market has already had an
impact. Telecom operator T-Mobile US Inc said it would
no longer stock the devices in its stores, instead shipping them
to anyone who come in to order a BlackBerry.
Sprint Corp, one of T-Mobile's larger rivals, will
take a "wait-and-see" approach.
One of BlackBerry's main contract manufacturers, Jabil
Circuit Inc, said it probably would part ways with the
company, its second-largest customer.