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BlackBerry Sales And Earnings Down, But Stock Price Up

Posted by Shelley Drake  |  March 28,2014  |  09:06 AM


BlackBerry Limited (NASDAQ: BBRY; TSX: BB) reported a big loss and a 64 percent drop in revenue for its fourth quarter, but its new CEO is bullish and investors seem to agree by pushing up the company’s stock price in pre-market trading.

For the quarter ended March 1, 2014 the company incurred a loss of $423 million, or negative $0.80 per diluted share, compared to net income of $98 million, or $0.19 per diluted share, in the fourth quarter of fiscal 2013.

The current year fourth quarter included an after-tax, non-cash charge of $382 million, or $0.73 per share, related to a change in the fair value of debentures; and after-tax restructuring charges of $105 million, or $0.20 per share. These charges were partially offset by an after-tax tax recovery of $106 million, or $0.20 per share.

Revenue for the quarter of $976 million was down 64 percent from last year’s $2.7 billion.

The company reports that for the 2014 quarter it recognized hardware revenue on approximately 1.3 million BlackBerry smartphones and approximately 3.4 million BlackBerry smartphones were sold through to end customers. Of the smartphones sold through to customers, approximately 2.3 million were the older BlackBerry 7 devices, not the newer BlackBerry 10 devices.

The net loss for the full year was $5.9 billion, or negative $11.18 per diluted share, compared to a loss of $646 million, or negative $1.23 per diluted share, in fiscal 2013.

The current year third quarter included approximately $4 billion after-tax in special charges. The company incurred a charge of approximately $2.5 billion after tax related to the impairment of long-lived assets; a primarily non-cash, after-tax charge against inventory and supply commitments of approximately $1.3 billion, which was primarily attributable to BlackBerry 10 devices; and approximately $225 million after tax in restructuring charges.

Revenue for the year of $6.8 billion was down 38 percent from last year’s $11.1 billion.

Executive Chairman and Chief Executive Officer John Chen said: “I am very pleased with our progress and execution in fiscal Q4 against the strategy we laid out three months ago. We have significantly streamlined operations, allowing us to reach our expense reduction target one quarter ahead of schedule. BlackBerry is on sounder financial footing today with a path to returning to growth and profitability.”

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