BlackBerry records US$4.4 billion loss in for Q3 FY2014

BlackBerryFollowing news this week that BlackBerry’s new CEO was beginning to implement his strategy to turn the beleaguered company around by rebuilding its executive team, it announced its financial results for the third quarter of its 2014 fiscal year. In a nutshell, they clearly show how far the company has to go. The company recorded a staggering US$4.4 billion loss on revenues of US$1.2 billion.

Services were responsible for most of the revenues, accounting for a 53% share. Hardware followed with a 40% share with software and other revenues accounting for the last 7%. Underlining the challenges facing BlackBerry, revenues were down 24% over the same quarter a year ago.

Smartphone shipments were, as expected, a disappointment. While BlackBerry said that some 4.3 million BlackBerry smartphones were sold to end customers during the quarter, it only recognized hardware revenue on 1.9 million of those as the rest had been accounted for in previous quarters. Of greater concern, most of the devices recognized were still BlackBerry 7 devices with BlackBerry 10 still struggling to establish itself in the market.

“With the operational and organizational changes we have announced, BlackBerry has established a clear roadmap that will allow it to target a return to improved financial performance in the coming year,” said John Chen, Executive Chairman and Chief Executive Officer of BlackBerry. “While our Enterprise Services, Messaging and QNX Embedded businesses are already well-positioned to compete in their markets, the most immediate challenge for the Company is how to transition the Devices operations to a more profitable business model.”

Chen added: “We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year. However, the Company is financially strong, has a broad and trusted product portfolio to work with, a talented employee base and a new leadership team dedicated to implementing our new roadmap.”

If there is a bit of good news in all this, it is that BlackBerry still has US$3.2 billion in cash, cash equivalents, short-term and long-term investments. In fact, it was only US$2.6 billion a quarter ago so the company still has funds to implement CEO John Chen’s plan to turn the company around.

Source : BlackBerry