BlackBerry Ltd. reports it had a staggering $4.4-billion US net loss from continuing operations in its latest quarter.
The struggling smartphone company's revenue was below expectations at $1.2 billion, down 56 per cent from the same quarter last year. And its adjusted loss from continuing operations was $354 million, or 67 cents per share — 23 cents below analyst estimates.
Analysts expected BlackBerry adjusted loss would be 44 cents per share and its revenue would be about $400 million higher at $1.6 billion US. The company reports in U.S. dollars.
While the past year has been calamitous for the once-iconic Canadian phonemaker, its new chief executive is reordering the company in hopes of a brighter future.
"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," CEO John Chen said in a release today.
"We have a strong balance sheet, over $3 billion in cash," Chen told analysts on a conference call. "I'll be the first one to tell you, the cash position we have today will definitely allow us to engineer a turnaround."
Along with its losses today, BlackBerry announced it is entering in to a five-year partnership with Foxconn, the world's largest manufacturer of electronic products.
'The cash position we have today will definitely allow us to engineer a turnaround'- BlackBerry CEO John Chen
Taiwan-based Foxconn will jointly develop and manufacture certain new BlackBerry devices and manage the inventory of them, the company said.
BlackBerry's operational performance during the quarter was well below expectations and a huge drop from the same time last year.
A year earlier, BlackBerry had a small profit of $14 million of three cents per share under standard accounting and $2.7 billion of revenue.
BlackBerry shares gained about three per cent to $6.90 on the TSX despite the large earnings miss.
Dramatic overhaul
Analysts expected BlackBerry adjusted loss would be 44 cents per share and its revenue would be about $1.6 billion.
This was the first financial report from BlackBerry since Chen became chairman and interim chief executive.
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.
He said parts of BlackBerry's business, including its enterprise services for organizations and its messaging products, are in good shape, and 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 road map."
Apple supplier
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."
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