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Old 12-20-2013, 08:05 AM   #1 (permalink)
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Default BlackBerry reports $4.4 Billion lost in 3rd Quarter

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BlackBerry Reports US$4.4 Billion Q3 Loss

WATERLOO, Ont. - BlackBerry (TSX:BB) lost a whopping US$4.4-billion in the third quarter as it reported that its newest smartphones, once touted as the way it would reclaim a competitive position, are hardly selling at all.

The Waterloo, Ont.-based company said more than 74 per cent of the 4.3 million BlackBerry devices that landed in user's hands during the quarter were its older BlackBerry 7 models, not the new BlackBerry 10 devices.

Those poor sales weighed on BlackBerry's revenue which was US$1.2 billion, down 56 per cent from a year ago when it didn't have new smartphone models on the market. It also was $400 million lower than analyst estimates compiled by Thomson Reuters.

BlackBerry, which is in the midst of significant changes to how it operates, also recorded a number of items related to its restructuring efforts, and the company managed to increase its cash holdings to $3.2 billion at the end of November.

Adjusted losses from continuing operations, which filter out various expenses like restructuring costs, were US$354 million, or 67 cents per share also 23 cents below analyst estimates.

The details come as BlackBerry also announced plans to shift much of it hardware development to Chinese electronics maker Foxconn under a five-year agreement will begin with manufacturing a smartphone for Indonesia early next year.

It's one of the many changes being made at BlackBerry under the leadership of chairman and interim CEO John Chen as he tries to reshape the struggling company.

BlackBerry said Foxconn will help develop new models and manage the inventory with operations based in Mexico and Indonesia.

In pre-market trade, BlackBerry's battered shares fell 45 cents or 7.2 per cent to US$5.80 after the earnings report.

A year ago, BlackBerry had a small profit of US$14 million, or three cents per share, under standard accounting and US$2.7 billion of revenue. Analysts expected BlackBerry adjusted loss would be 44 cents per share and its revenue would be about US$1.6 billion.

Since Chen joined BlackBerry last month, replacing BlackBerry CEO Thorsten Heins, he has started a dramatic overhaul of its executive ranks and begun fresh efforts to turn around the company.

"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," Chen said in a statement.

He said parts of BlackBerry's business, including its enterprise services for organizations and its messaging products, are in good shape. He said the most immediate challenge is to improve its devices operations.

"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," Chen said.

"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."

Chen says the partnership with Foxconn demonstrates BlackBerry's commitment to making devices over the long term.

There has been speculation that BlackBerry could get out of the device business in light of intense competition from Apple, Samsung and other smartphone makers.

For many people, Foxconn is best known as one of Apple's main suppliers.

"BlackBerry is an iconic brand with great technology and a loyal international fan base," said Terry Gou, Foxconn's founder and chairman.

"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."

with files from David Paddon in Toronto

Source: huffingtonpost.ca
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Old 12-20-2013, 08:07 AM   #2 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

OS 7 devices are still selling 3:1 against BlackBerry 10 devices.
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Old 12-20-2013, 08:42 AM   #3 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

And the question still remains what strategy are they going to use to gain back lost market share, as no one is buying the BB10 devices. The return to profitability is always another quarter away.

Small wonder no one wanted to buy the company. Far worse than anticipated.
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Old 12-20-2013, 08:46 AM   #4 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

I don't have a clue, but with just over 1 million BB10 sales, and MDM adoption stale, they don't have many options left.
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Old 12-20-2013, 09:31 AM   #5 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

The street seems to be showing Chen much respect. After getting thumped early this morning (Friday, 12/20) the stock has rebounded and is showing a nice gain. Strictly from a finance side, this is very encouraging for the stock, and by proxy, the company. Chen asked for "a couple quarters" to get a handle on their strategies and see how things shake out. With a $4.4 Billion loss this quarter I'm not sure he has that long, but Wall Street seems to be giving him a vote of confidence by overlooking these bottom line results.
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Old 12-20-2013, 09:38 AM   #6 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

I think Chen is the right guy for the job, but he has got to come up with a visible strategy. The reorg looks good on paper, but how is "messaging" going to be monitized. QNX is wonderful, but a very small money maker. And handsets is a total disaster. The MDM market is crowded already.
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Old 12-20-2013, 02:17 PM   #7 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

Apparently they like the Foxconn deal - BBRY stock is up to $7.06 right now.
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Old 12-20-2013, 03:37 PM   #8 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

They like his promises and will give him some time.
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Old 12-20-2013, 06:21 PM   #9 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

Their announcment that the handset builder will be Foxconn is the only thing the market responded to. Prior to the statement the stock was headed south.
They also indicated there may be some new phones Foxconn will build for BB.
Wonder if BB will try to go in another direction and away from the current OS
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Old 12-20-2013, 06:39 PM   #10 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

Away from manufacturing anyways. Foxconn has a design division as well.
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Old 12-20-2013, 06:45 PM   #11 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

There were some indications Foxconn would do both...time will tell
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Old 12-21-2013, 12:14 AM   #12 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

The impression I got was that Foxconn would build and eventually design low-end devices running BB10. BlackBerry would continue to design and build the premium devices.
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Old 12-21-2013, 05:46 AM   #13 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

"premium"
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Old 12-21-2013, 06:20 AM   #14 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

I thought I read that BlackBerry keeps the "Intellectual Property".

Still waiting for that Marketing Strategy so they can sell their new low end and premium devices.
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Old 12-21-2013, 01:43 PM   #15 (permalink)
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Default Re: BlackBerry reports $4.4 Billion lost in 3rd Quarter

At Blackberry "Intellectual" is not a word.
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