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Press Release: BlackBerry reports Q3 2014 earnings

By Bla1ze on 20 Dec 2013 07:08 am EST
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Alright CrackBerry Nation, settle in. BlackBerry has just posted their earnings announcements for Q3 2014. This is the first time we're getting a real look at things since BlackBerry received a $1 billion investment from Fairfax Financial and other investors while also naming John S. Chen as Interim CEO​ due to their cancelling of the Q2 2014 earnings conference call and webcast

Press Release

BlackBerry Reports Third Quarter Results for Fiscal 2014

WATERLOO, ONTARIO--(Marketwired - December 20, 2013) - BlackBerry Limited (NASDAQ: BBRY)(TSX:BB), a global leader in wireless innovation, today reported financial results for the three months ended November 30, 2013 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Q3 Highlights:

  • Company begins transition to operating unit structure: Enterprise Services, Messaging, QNX Embedded business and the Devices business
  • New organizational structure to drive greater focus on services and software, while establishing a more efficient business model for the Devices business -- Enterprise Services: Company sees increasing penetration of BlackBerry Enterprise Service 10 (BES10) with over 30,000 commercial and test servers installed to date, up from 25,000 in September 2013; Company remains a mobile device management leader with global enterprise customer base exceeding 80,000
  • Messaging: Over 40 million newly registered iOS/Android users in the last 60 days; more than a dozen Android OEMs to preload BBM, including most recently LG; over 250,000 BBM Channels created by global user base since launch of BBM Channels on BlackBerry, including large brands such as Coke Indonesia and USA Today; BBM is the most secure mobile messaging service for use in regulated enterprises
  • QNX Embedded Business: QNX to unveil new technology in automotive and cloud services at the 2014 International Consumer Electronics Show in January
  • Devices: Company strikes joint device development and manufacturing agreement with Foxconn; initial focus of partnership to be development of a consumer smartphone for Indonesia and other fast-growing markets in early 2014
  • Revenue for the third quarter of approximately $1.2 billion, compared to $1.6 billion in the previous quarter; Company recognizes revenue on approximately 1.9 million smartphones in the third quarter, compared to 3.7 million smartphones in the previous quarter
  • Company takes primarily non-cash, pre-tax charges of $4.6 billion associated with long-lived assets, inventory and supply commitments, and previously announced restructuring and strategic review process; GAAP loss from continuing operations of $4.4 billion, or $8.37 per share diluted, compared with a GAAP loss from continuing operations of $965 million, or $1.84 per share diluted, in the prior quarter
  • Adjusted loss from continuing operations for the third quarter, excluding charges, was $354 million, or $0.67 per share diluted, compared with adjusted loss from continuing operations of $248 million, or $0.47 per share diluted, in the prior quarter -
  • Cash and investments balance of $3.2 billion; cash used in operations of $77 million

Q3 Results

Revenue for the third quarter of fiscal 2014 was approximately $1.2 billion, down $380 million or 24% from approximately $1.6 billion in the previous quarter and down 56% from $2.7 billion in the same quarter of fiscal 2013. The revenue breakdown for the quarter was approximately 40% for hardware, 53% for services and 7% for software and other revenue. During the third quarter, the Company recognized hardware revenue on approximately 1.9 million BlackBerry smartphones compared to approximately 3.7 million BlackBerry smartphones in the previous quarter. Most of the units recognized were BlackBerry 7 devices. During the quarter, approximately 4.3 million BlackBerry smartphones were sold through to end customers, which included shipments made and recognized prior to the third quarter and which reduced the Company's inventory in channel. Of the BlackBerry smartphones sold through to end customers in the third quarter, approximately 3.2 million were BlackBerry 7 devices.

GAAP loss from continuing operations for the quarter was $4.4 billion, or $8.37 per share diluted. The loss includes a non-cash, pre-tax charge against long-lived assets of approximately $2.7 billion (the "LLA Impairment Charge"), a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion (the "Q3 14 Inventory Charge"), and pre-tax restructuring, legal and financial advisory charges of approximately $266 million related to the Cost Optimization and Resource Efficiency ("CORE") program and the strategic review process. This compares with a GAAP loss from continuing operations of $965 million, or $1.84 per share diluted in the prior quarter, and GAAP income from continuing operations of $14 million, or $0.03 per share diluted, in the same quarter last year.

Adjusted loss from continuing operations for the third quarter was $354 million, or $0.67 per share diluted. Adjusted loss from continuing operations and adjusted diluted loss per share exclude the impact of the LLA Impairment Charge of approximately $2.7 billion ($2.5 billion after tax), the Q3 14 Inventory Charge of approximately $1.6 billion ($1.3 billion after tax) and pre-tax restructuring and legal and financial advisory charges of approximately $266 million ($225 million after tax) related to the CORE program and strategic review process incurred in the third quarter of fiscal 2014. These impacts on GAAP loss from continuing operations and diluted loss per share from continuing operations are summarized in the table below.

The total of cash, cash equivalents, short-term and long-term investments was $3.2 billion as of November 30, 2013, compared to $2.6 billion at the end of the previous quarter. Cash flow used in operations in the third quarter was approximately $77 million. Cash flows provided by financing activities in the third quarter were approximately $991 million, including the proceeds from the issuance of debt. Uses of cash included intangible asset additions of approximately $234 million and capital expenditures of approximately $46 million. Purchase obligations and commitments amounted to approximately $2.1 billion as at November 30, 2013, with purchase orders with contract manufacturers representing approximately $664 million of the total.

"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."

BlackBerry Announces Five-Year Strategic Partnership with Foxconn

The Company announced today that it has entered into a five-year strategic partnership with Foxconn, the world's largest manufacturer of electronic products and components. Under this new relationship, Foxconn will jointly develop and manufacture certain new BlackBerry devices and manage the inventory associated with those devices. The initial focus of the partnership will be a smartphone for Indonesia and other fast-growing markets targeting early 2014.

"This partnership demonstrates BlackBerry's commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions," said Chen. "Partnering with Foxconn allows BlackBerry to focus on what we do best - iconic design, world-class security, software development and enterprise mobility management - while simultaneously addressing fast-growing markets leveraging Foxconn's scale and efficiency that will allow us to compete more effectively."

BlackBerry will own all of its intellectual property and perform product assurance on devices through the Foxconn partnership, as it does currently with all third-party manufacturers.

"BlackBerry is an iconic brand with great technology and a loyal international fan base," said Terry Gou, Founder and Chairman, Foxconn. "We are pleased to be working with BlackBerry as it positions itself for future growth and we look forward to a successful strategic partnership in which Foxconn will jointly develop and manufacture new BlackBerry devices in both Indonesia and Mexico for new and existing markets."

BlackBerry will focus heavily, via internal development, on market segments where its continuous innovations in secure hardware, software and services remain critical and integral to enterprise and government customers. BlackBerry also intends to drive adoption of its multi-platform BBM, deliver real-time, reliable and secure messaging through its Network Operations Center (NOC), and grow its enterprise mobility and mobile device management business through on-premise and cloud-based solutions for cross-platform devices as well as its own.

Outlook

In the fourth quarter, the Company anticipates maintaining its strong cash position and further reducing operating expenses as it continues to implement its previously-announced cost reduction program.

Reconciliation of GAAP gross margin, gross margin percentage, loss from continuing operations before income taxes, loss from continuing operations and diluted loss per share from continuing operations to adjusted gross margin, adjusted gross margin percentage, adjusted loss from continuing operations before income taxes, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations:

Note: Adjusted gross margin, adjusted gross margin percentage, adjusted loss from continuing operations before tax, adjusted loss from continuing operations and adjusted diluted loss per share from continuing operations do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company's operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company's GAAP results.

(1) During the third quarter of fiscal 2014, the Company reported GAAP gross margin of $(1.3) billion or (106%) of revenue. Excluding the impact of the Q3 14 Inventory Charge and CORE charges included in cost of sales, the adjusted gross margin was $404 million, or 34%.

(2) As part of the Company's ongoing effort to streamline its operations and increase efficiency, the Company commenced the CORE program in March 2012. Further, the Company announced the formation of a special committee to conduct an organizational strategic review on August 12, 2013. During the third quarter of fiscal 2014, the Company incurred charges related to the CORE program and strategic review process of approximately $266 million pre-tax, or $225 million after tax. Substantially all of the pre-tax charges are related to one-time employee termination benefits, facilities and manufacturing costs related to the CORE program and legal and financial advisory costs related to the strategic review process. During the third quarter of fiscal 2014, charges of approximately $76 million were included in cost of sales, charges of approximately $37 million were included in research and development and charges of approximately $153 million were included in selling, marketing, and administration expenses.

(3) During the third quarter of fiscal 2014 the Company performed a long- lived asset impairment test and based on the results of that test, the Company recorded a non-cash LLA Impairment Charge of approximately $2.7 billion pre-tax, or $2.5 billion after tax. (4) During the third quarter of fiscal 2014, the Company recorded a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion, or $1.3 billion after tax, which is primarily attributable to BlackBerry 10 devices.

A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-800-814-4859 or through your BlackBerry® 10 smartphone, personal computer or BlackBerry® PlayBook™ tablet at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 10 am by dialing (+1)416-640-1917 and entering pass code 4612570# or by clicking the link above on your BlackBerry® 10 smartphone, personal computer or BlackBerry® PlayBook™ tablet. This replay will be available until midnight ET January 3, 2014.

121 comments

dayno25

Still believe in BlackBerry

SQN100-3; 10.2.1.1055

dansonsew

interesting... a 5 year partnership with foxconn to produce a new phone in early 2014

2dfx

read: developing markets (cheap).

They probably can't get enough of a price cut having Celestica make their phones for developing markets...so they're turning to foxconn to lower their production costs and make it a reality.

Posted via CB10 via the BlackBerry Q10!

jhumel23

Oh yeah still love BlackBerry! Keep moving forward! ;D

pittster

I'd never stop believing

Posted via CB10

TranceRomance

Insert "Don't stop Believing" by Journey, NOW!!

Posted via CB10 with my T-Mobile  ‎BlackBerry Q10...SON!

a1s2d3f4g5

Nice cash management. This q was a positive

Posted via CB10

IJKBB10

Agreed! I was also quite impressed :)

Kingdmen

They missed targets. They sold next to nothing. This wasn't a good quarter, at all. The stock will tumble as per usual

Posted via CB10

birdman_38

It's actually up 2% the first hour.

Tim Heard

Yep. I don't know why. I suspect the huge loss is the first step toward getting back quite a bit in taxes. Also probably sets the stage for better future numbers to have the losses written off.

I'm not a financial guru though. Not sure why the markets are behaving the way they are.

LOUDONS

The investment community likes that they've gone with Foxconn.

Nharzhool

I'm not entirely sure what is going on, but it is at $7.21 right now...

maam

I have faith in BlackBerry

Himanshu Mehta

BlackBerry will be back banging a apple on face of kitkat and throwing all out of windows ;)

Himanshu's Z10

Elite1

Wait, was that a pun?

Posted via CB10 from my new Z30!

Amar Toraskar

Nice one dude .3 shoots in one B(BB)ullet :-)

ibpluto

Miss on earnings, miss on revenue. Good cash management. Guidance today will be key to prevent a major bloodbath

CB10'n it via da Z

rhs84

Not a blood bath at least.

Ballin' it will my Z10!

the_sleuth

Positives: Cash of $3.2 Bil, over 40 Mil active BBM users in iOS and Android

jd914

The end is near. I don't see how anyone can put a positive spin to this.

Maal628

Why comment? This was expected.

#PoweredByBlackBerry

Meok

Then I suggest you jump ship now. We'll send you a post card from port-turnaround when we get there.

GS51

Well there is no like button here so ill just say good reply :)

Posted on my Z10 Via CB10

Gnomesane

Most hardware sales continue to be BB7 devices... So enterprise has spoken, wondering if the trackpad and call buttons will reappear on the qwerty devices.

At least they still have a good cash position!

Posted via CB10

rthonpm

You seem to be under the impression that enterprises move quickly in terms of technology. Compare the user base of BES 10 to the legacy BES as well as the large areas of growth for BlackBerry being primarily in emerging markets and the BBOS sales make more sense.

The lack of a trackpad or call buttons is the least of the issues with BlackBerry right now.

Gnomesane

Cheers, I may have overstated the case. :)

Yes, I am very aware of the glacial pace at which some companies move. I've done stints with CBC for example using Novell GroupWise on XP. ;). They've since moved on to Gmail and Windows 7 but it took them forever.

I appreciate the myriad reasons why legacy continues to outsell BB10. Just a recent feeling that the legacy base (most of whom don't use forums) aren't as sold on the buttonless experience. Personal belief is that reintroducing the button row on a qwerty model might help move sales of that userbase. Wouldn't want to see buttons added to the full touch.

Posted via CB10

sk8er_tor

For example, the government of Canada will not approved BB10 devices for the people I know until late 2014. They must continue buying BBOS until then.

Meok

I think the outselling of BB10 devices by BB7 is more about the price point. BB7 devices are not only cheaper, they come with unlimited internet access through BIS. Data charges are high in many markets around the globe and it was really BIS that pushed people to BlackBerry in the first place. Why buy a device for more money that will cost you more money to maintain monthly?

sk8er_tor

And BB7 consume less data, which is vital for the market where BB is successful.

vivsrulz

Agreed! On my 9700 i used about 150 MB of data with moderate browsing and other functions. Now using my Q10, Ive already burned through 700MB of data in 2 weeks :|

Bacon Munchers

Yes, plus in those countries, people use it in lieu of email for those reasons, so BIS Is massive.

When the first Foxconn unit gets launched, this will start to change.

Gazza12

Yeah noticed the BB7 thing too. Long live the trackpad !

Prem WatsApp

They need to implement the missing legacy features in BB10, fix bugs, etc.
The promised end-to-end encryption is coming soon (early 2014 / spring), indispensable for regulated industries.

Businesses are also often very backwards and rely on stability. Major banks here in Australia are still running Windows XP themselves (visit your local Commonwealth Bank, Bendigo Bank,...), but warn customers to upgrade when running XP to do online banking. Ironic!

(they can afford an expensive extended support contract with Microsoft)

Posted via CB10

Georgefly97

Oh lord. Well, what did we expect.

Posted via CB10

m1kr0

Could have been worse.

Posted via the Android CrackBerry App!

PhilipDZ

There is no way to put a positive spin on this as far as financials go, the only devices sold where old inventory 1.1M that's it! The rest where bb7. Not good at all.

Posted via CB10

nismorg

its hard to sell hardware when carriers don't carry the product on shelf.

Its time for BB to push hard on direct sales.

barney009

+1 also hard to sell handsets when most consumers aren't even aware that Blackberry has a new OS. They have to plough their money into marketing!

Posted via CB10

Bacon Munchers

Yes. I have been riding that advantage with my bb10 devices on this basis.

Unfair advantage in business.

DanielLui1

I will support BlackBerry till the very end. That being said, I hope they don't completely pull out of the consumer market just because of their major struggles over the years to get recognition in the consumer market. Sure things haven't favoured them over the years but they still have a chance of making a positive splash in the consumer market if they do all the right things.

rickster2611

I've been saying this for ages.

The green shoots of recovery are there but they need to build momentum.

The five year Foxconn deal is what was needed for BlackBerry.

For years BlackBerry were spreading themselves way too thin. Trying to be all things to all people.

BlackBerry needs to update the quality control of it devices. No more silly leaks.

Time to offer a BlackBerry 10 device for a BBOS7 device . Recycle the parts for a cheaper BB10 device e.g Z5

Develop a technology trends team to follow the tech development in terms of processor, screen size and quality .

Posted via CB10

Elite1

All of this, plus just straight up putting an end to sales of BBOS devices.

And marketing that clearly states this isn't your daddy's BlackBerry and focuses on new features and strength of new BB10 platform.

Posted via CB10 from my new Z30!

sk8er_tor

Yeah, I agree. But for the enterprise market, you can't exactly put an end to BBOS.

SEAWARRIOR

if they quit selling BBOS devices, that leaves them losing approx. 75% of total devices sold...

nibbsde

Blackberry strong.

STL100-1 OS:10.2.1.1055 TRINIDAD

iqnetcomdotca

Might as well flush as much of the "bad" news as possible right now, get it all out there and over with.

Nice work on cash management.

We are in the next phase of turning this big ship.

Go John go!

Posted via CB10 from my Q10 (SQN100-3)

GoJaysGo

Not one word of BB10 only "QNX Embedded Business"... This is the end of BB10.

birdman_38

I'm impressed there's no writedown on the Q5 or Q10. There is still quite a large gap between BB10 and OS 7, likely because BB10 isn't heavily promoted.

Don't be surprised if we see OS 8 for enterprise this coming year.

SirJes

I swear, when chen didn't mention hardware, it was blackberry is pulling out of hardware, now that this is proven wrong, it's the blackberry 10 is dead...-_- if I see another like this I'll reach through a screen and break someone's neck

Posted via CB10

rhs84

BB10 is dead.

Couldn't help it. :)

Ballin' it will my Z10!

BionicKris

Lol. My thoughts exactly!

Posted via CB10

Gambit_DE

This is just as expected. No need to cry, no way to cheer. I hate quarterly thinking

Posted via CB10

Gord Cluthe

+1 to this.

Making these radical assumptions every 90 days is ludicrous, how sad is the world when turnarounds are expected to happen in a mere 3 months?

B-H-C

This news was expected. However, plenty of positives going on here.. Will they release an Android powered BlackBerry for emerging markets..?

SirJes

Am I the only seeing a positive that there wasn't another write down?

Posted via CB10

mylrob

Not the only one. The deal with Foxconn is a decision in the right direction, hopefully they will outsource to other regions as well. What really surprised me was that they have not been burning cash as everyone predicted.

Soeasy

They already wrote down the Bb10 inventory. Why would there be another write-down?? I highly doubt they were continuing to produce massive inventory that they would need to write-down again.

paulmike83

Wish they went private. But, BlackBerry isn't dead yet. When they start owing (hopefully never) then we will talk. Go BlackBerry

Team BlackBerry

jeffydude05

75% of devices sold were BB7.

somerandombbusername

BB10 is so awesome, I don't understand why BB7 devices are still more popular. Cost, bes compatibility?

felberry83

Bis

Z10 OS 10.2.1.1055 - Channel C00194AE

SEAWARRIOR

they work the way the owners want them to,,, it's been said, often, that they need to fix bridge & bring legacy features/functionality over to "10", in addition to present day specs, to get most legacy users to budge...

Xopher

With BlackBerry hardly marketing or trying to sell BlackBerry 10 devices, how could anyone expect devices to sell?

Several carriers only sell BlackBerry products online, with no marketing or carrier backing. You have to be explicitly looking to buy a BlackBerry to be able to find one for sale. That doesn't make for quality purchase numbers.

Here in the USA, the best BlackBerry (Z30) is only for sale through one carrier, only through their website, and without any marketing whatsoever. How does that help increase product sales?

What's worse is that BlackBerry hasn't done ANY real marketing of their products in 2013. It comes across as BlackBerry whispering "shhh. Web have devices for sale. Don't tell anyone."

Passive marketing = passive sales.

I truly hope the new board actually tries to sell devices going forward.

Posted via CB10

TheMacDaddyTJ

Bottom line as I see it: The reason Blackberry's marketing sucks is because they have nothing to market (think back to the Super Bowl ad). Only thing novel about the OS is the hub. That's it. Everything else about the devices and user experience is pretty subpar compared to competition, and even compared to legacy blackberry! The devices aren't as solid as legacy BBOS devices (my Q10 feels like a cheap toy compared to my 9930) and their specs suck, compared to competitors. Also not a lot of good apps for it (yet). So what do you expect them to market? It doesn't hold up well against iOS or Android in terms of utility, or novelty. It doesn't hold up well against BB7 (os and devices) in terms of efficiency or quality. Hell even typing, editing text, and app switching are more efficient on BB7 than on my Q10. So what a blackberry is known for (messaging), the BB10 devices are no longer as good at. It seems to me the only thing Blackberry can successfully market is how they've successfully taken a Cadillac and turned it into a Chevelle. I've used BBs since 2001 and remain a fan. But what blackberry is today (the devices and OS) is not something I would fall in love with were I to discover it today for the first time. When my 9930 dies, that'll be the close of my history with Blackberry. Even if the company turns around and is profitable again, we've seen the last of what made Blackberry a legend. Because Blackberry themselves have killed it.

sianto

Don't forget to bring out the Z50, BlackBerry!

Posted via CB10

adonesc

Oh boy...I mean no one expected a cloudless sky...but I don't know how this qualifies as positive in any way, shape or form?!
Yes there have been more positive developments since last quarter. Also, it's true that the bloodbath which was expected did not materialise.

Yet,this is more like stemming the bleeding while the gaping wound is still there...

And a 5 year partnership with Foxconn...those bloodsucking parasites that do business with all the Appletards!

Cartman says: Screw you guys I'm going home!

sandyalisoncan

Yes. Nothing positive here.

Posted via CB10

sandyalisoncan

Should be a blood bath for the stock today.

Posted via CB10

n_africanus

I've checked crackberry nearly everyday since I got my Z10 in the first week of september and downloaded the app two or so days later. Never registered or posted until today, after feeling impelled to do so since getting 10.2 on tuesday. I've owned, in consecutive order, an 8830, a curve 3G, bold 9900 and now, my Z10. I'm probably a blackberry fan.
Up until I got 10.2, I used to think two of BB10's USPs were its being a proper multitasking OS and the sheer aesthetic appeal of the UI. With 10.2, I've noticed quite a number of tweaks and improvements, all geared to make for a more user-friendly experience. The UI's aesthetic appeal seems to have been watered down in order to achieve this, though.
With 10.1( the second iteration), the quality and beauty of UI design, layout,graphics and fonts sort of leapt out at you. I compared BB10 with android and ios and thought " this(BB10) has to be the best designed UI/OS available." I REALLY admired the previous design. The current version has clearly lost a lot of weight(a whooping 2GB in my case), seems to have shed a shade or two of colour, adopted a font size that gives it a cheaper, more cluttered look and has become,IMO, a bit underwhelming. For instance, the look of 'car finder', an app I have (probably an android app), has definitely changed for the worse. I used to show my Z10/BB10 off. Somehow, my inclination to do so has waned.
If BB10 is to thrive, I think it has to find a way to revert to that high-quality look while it continues to enhance the user experience.

jasoncomely

@n_africanus Interesting insight, and I have to agree. There's something 'plain jane' about 10.2.1 but I couldn't put my finger on it. You identified it right there.

Posted via CB10

jasoncomely

Blackberry needs to focus on third party developers (i.e. still no Audible app for BB10!), improving OS 10 (I love it but it's got a long way to go) and getting into retail stores. Keep moving!

Posted via CB10

JamesA Winsteadjr

Things that would be nice to have:

OS updates pushed to all phones at the same time like Apple. AT&T hasn't released 10.2, but there's rumors of 10.2.1 coming out early next year.

Make all carrier compatible phones available on the website. People who want a Z30 but aren't with Verizon should be able to get the phone without the carrier specific features like color or wireless charging.

More American banking apps. I miss the Bank of America app.

Bring back memory cleaning. It worked and should be an option even if OS10 does it automatically.

Close the gap between features on OS10 and OS7.

These things should be possible, or they should explain why the aren't.

Posted via CB10

tracygee

The OS updates thing is a bugger. The carriers aren't in any big hurry as they have virtually no BBerry customers. In a way, it's a catch-22.

I've noticed that WindowsPhone has gotten around this by putting in a "developers" section on their phones. People go online and register as a "developer" (anyone can) and then the new official OS updates hit their phones...without waiting for the carriers. I wonder if this is an option for BBerry.

MGDania

Here is a positive, Canadian taxpayers will be helping finance BlackBerry operations with more tax refunds.

Posted via CB10

adonesc

It's worth pointing out that this is still part of Thorsten Heins Ketchup's unfortunate legacy. While he was hiding in his Batcave with his millions, people where loosing their jobs, dignity and the ability to expect a decent life and living standard.

However, soon it will be Mr. Chen's turn to prove his mettle as a leader. Then he won't be able to assign the blame to others!

Cartman says: Screw you guys I'm going home!

Bjmac

Anyone know how many bad qtrs in a row? Has to be at least 10. This one is a disaster. No way to spin this as positive. Sorry bbeliebers, it's not good. Give me $1B and I'll be in a great cash position with far less losses and no real plan to generate revenue.

Bbm numbers are impressive but it's not generating revenue... yet. More cuts needed to op expense. They need to go through their product line. If it's not generating revenue or driving brand awareness like bbm it needs to be cut or have a solid turn around plan. That includes shelving BB10 if necessary. As a bb10 user I'd truly hate for that to happen but it's time to start running this company as a business, not just on hopes and dreams.

Lots of levers being pulled and buttons pressed trying to save BlackBerry but with no results. At least last year BB10 was the plan and it was something you could believe in. Bb10 failed as a turn-around product. Now what??

BlackBerry doesn't have many qtrs left bleeding losses this bad.

Posted via CB10

Loc22

I think this is really good news, as they are writing off redundant assets, cutting costs, going into strategic partnerships and concentrating on their core business.

This means that the value of BBRY will be further diluted and as it is already under valued, it will be a lot more attractive to investors. This would hopefully bring up the price of the shares and hopefully the momentum of it will bring up the consumer confidence too.

sandyalisoncan

Stock up in pre market. Guess I was wrong about the blood bath.

Posted via CB10

adonesc

Just to put things in perspective...below is a cut and paste of today's New York Times article titled "BlackBerry Posts Huge Loss":
---------------------------------------------------------
"By IAN AUSTEN
Last Updated: December 20, 2013
OTTAWA — BlackBerry reported a $4.4 billion loss and a 56 percent drop in revenue for its fiscal third quarter on Friday and said it would step back from its once-core handset business through a partnership with the Chinese contract manufacturer Foxconn.

The dismal financial news followed the failure of BlackBerry to find a buyer for the company last month and the replacement of Thorsten Heins, the chief executive, with John S. Chen, the former chairman of Sybase. Mr. Chen has since fired several high-level executives at the company.

The substantial loss, which follows one of nearly $1 billion in the second quarter, again reflected the failure of the BlackBerry 10 line of phones, which were portrayed as a lifesaver for the company when introduced earlier this year. The third-quarter loss included a $2.7 billion write-down mainly related to BlackBerry 10 phones. Of the 4.3 million BlackBerrys purchased by consumers and businesses during the quarter, 3.2 million were models that use the obsolete BlackBerry 7 operating system.

The company’s $1.2 billion in revenue compared with $2.7 billion in the same period a year ago and represented a 24 percent drop from the previous quarter.

BlackBerry, like other many other hardware companies including Apple, has long relied on Foxconn to manufacture phones. But the new partnership appears to take the relationship to a new level.

The arrangement seems to be a way for BlackBerry to effectively hand over some of its handset business to a Chinese company without running afoul of Canadian foreign investment laws. The government of Canada has made it clear that for national security reasons it would not allow the sale of BlackBerry or any significant portion of the company to any Chinese firm.

BlackBerry said that it would jointly develop and manufacture some phones with Foxconn in the future, including a new model aimed at the Indonesian market, and that Foxconn “will manage the inventory of those devices.” BlackBerry said that it will control all of the “intellectual property” in phones created through the partnership.

As he has suggested previously, Mr. Chen said that as the company slowly steps out of the handset business, it will focus its energies on its BlackBerry Messenger instant messaging service; software that allows companies to manage and control smartphones used by their employees; and developing mobile data products for automobile manufacturers and mobile security.

“With the operational and organizational changes we have announced, BlackBerry has established a clear road map that will allow it to target a return to improved financial performance in the coming year,” Mr. Chen, who is also executive chairman, said in a statement."

Cartman says: Screw you guys I'm going home!

wavemotion

Blackberry will fight on. BB10 is great! I agree with the Direct sales. Forget the Carriers for a bit , try a different road. When they see traction they will knock on your door.
Remember they are in it for the cash. Which means what the customer demands.
So blackberry has to innovate and give customers a reason to request black berry devices and services.
Back to the Lab BlackBerry! Bring some new service or tech that people crave and Need!!!

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sirchocolate

2014 year?seriously?!

diogoteixeira87

The most important here is the foxconn partnership. It means more and cheaper devices. Great specially to compete against android in key markets like Indonesia.

Posted via awesome BlackBerry Z10!

Siya10

Bad/good news?

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AnotherBillJ

I agree with other posters who have stated that it's the carriers that are hurting sales the most for BlackBerry. The Z30 is, quite simply, the best phone on the market but you can't find one in a Rogers store (online only = fail) and the other carriers don't know enough about the phone to properly sell it.
BlackBerry needs to change its business model so it can sell the phones directly. They're making great phones, now get those phones in to people's hands.

Cheers. :)

Gino Brizuela

How about some frequent BB OS 10 updates for the US customer so we have something to show off.

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jiemponce

My faith is still with BlackBerry... I don't want to see myself holding ios or android as my primary device. :'((

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camlowe

The top banner for CBC News posts "BlackBerry posts $4.4B loss..." and that is where most people will stop reading.

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andy957

Agreed. It's all about perception.

Meok

Just want to be sure I am understanding correctly. Did Chen say that BlackBerry will continue to manufacture the high end devices while outsourcing the low end devices to FoxConn?

Jabbarice

As far as BlackBerry 10 goes they just need to focus now on the software. The device is awesome just so much bad apps. If the improve the software drastically, they might turn users around.

Powered by BlackBerry Q10

Drmoe

Not as bad as I thought it was going to be! It's actually pretty good! #standingfirm

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412forrester

no mention of android (or any additional) official app functionality? bummer! will the company ever put their marketing efforts behind this?!?! besides crackberry and other forums it's like radio silence....you don't hear anything about .apks on devices from management (except the Google Play denial recently). thought the overall earnings were good, love BlackBerry, but wish there would've been some commentary about the obvious hole here which is apps. does mgmt really not think that's relevant to tell the average customer about? Nobody else in my family - including two former intense business users - have any idea, and all of them are former BlackBerry users who didn't exactly hate the device....I'm sure they'd switch back, even for their business purposes....they just can't get the Bank of America app or Starbucks app through a channel they're familiar with.

Playbook007

Had the z10, now sporting the z30 and it is a fantastic device. It's really hard to believe these devices just won't sell. Q4 will be worst. The perception that BlackBerry is dead over the last few years in the media and the masses is coming to fruition. It us a self fulfilling prophecy! Time to stock up on BlackBerry devices.

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barney009

Yes the handsets are great but all I ever read in the press is negative. Its going to be so hard for BlackBerry to change peoples perception - most think BlackBerry are dead so will not even consider them.

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BerryRipe

This was expected, don't act like it wasn't and be so surprised.

Mr. Chen have zen and fight hard my friend!

Keep The Faith

boujwalii

Of course I believe in blackberry. Its really funny to see that BBC gave a favourable headline. The press on this side of the world focused on the "loss".....we Crackberr i answered know a lot better.

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trwrt

How many times have I seen Apple ripped here for using FoxConn and their terrible working conditions, etc. Let the rehabilitation begin!

Flog Gnaw

I refuse to use bb7 devices again. For me, folding BB10 is just as bad as blackberry folding all together.
Does anyone think it's fair to have doubts about buying a Z30 now?

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craigdh1

It's better then I thought... things will workout in the end.

jiminica

I am not unhappy at the report, and mildy surprised. I estimated the operating loss much higher. I was less than enthused to see more sales of the BB7 product, but in retrospect they are getting rid of inventory.

With the new structure, I am happy to see them postion themselves better in the market.

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Bacon Munchers

The question I have is:

What part of the ER call turned the market hard-right? Was it one statement in particular, or just general???

len5

Chen said BB no longer making high end phones for north American market.

Prem WatsApp

I syggest you read up on that again.

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Prem WatsApp

* suggest

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jay64

butt ugly and the stock is up on pure fluff. Gotta love this market.

yokogeri374

Keep on trucking blackberry!!

keypeck

1 hour ago - The University of Waterloo has acquired five buildings and land from BlackBerry in a deal worth $41 million. http://t.co/xNdXGKnhTr

sandyalisoncan

This was a lesson for me about how as an investor in BlackBerry I have no idea how to buy or sell and when with BlackBerry stock.

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jojo beaconsfield

Only one lesson to offer you,Don't be faint of heart,LOL

sandyalisoncan

I am holding BlackBerry stock because I believe in the product and with them to the bitter end, if that is where the day takes them.

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Rootbrian

Positive! Was looking forward to this. :)

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thecsman

The paranoid question is, will Foxconn rig the hardware to let the Chinese peek at BlackBerry security?

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WreckingBall60

Not a bad result. Stock ended up 16% on the day?? Must be analysts see some potential in the Foxcomm arrangement.

I noticed that BlackBerry is establishing "a more efficient business model" for the devices. I wouldn't be surprised if they are going to direct off-the-shelf sales perhaps through wider variety of stores since BlackBerry doesn't seem to be getting the right kind of front end support from the telcoms anymore. I just hope that the Foxcomm deal doesn't cheapen the quality of the BB phones.

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outlander_vn

What's the GAAP?, Why "GAAP loss" up to 4,4 billion USD???

stevenfbabyy

Apple is about to lose lots of market share. Not for nothing, you also have a lot of iphone 4(s) users who are looking for a new phone but not convinced by apple or android. I think with the huge investments and management changes the company can turn around within a few months.

It's very possible that they will fail, but it's also very possible they will turn around.