Blackberry Losses Equate to $965 Million DeficitBy: Meaghan Ellis - September 27, 2013
The past few years have been a gradual decline for Canadian wireless company, Blackberry Limited. However, the past couple weeks have accelerated the rate of the company’s demise.
Due to relentless pressure from prominent competitors, Apple and Samsung, along with plummeting sales, the smart-phone pioneer initially reported a massive inventory of approximately $1.2 billion in unsold phones. However, today’s announcement made the company’s detriment a little more concise. In a formal press release rendered today, BlackBerry made the extent of their financial damage public with a detailed report of their fiscal 2014 results for the second quarter of the year.
Blackberry reported a staggering $965 million loss, stating that revenue for the second quarter barely equated to $1.6 billion in revenue. To the unaided eye, this enormous figure of $1.6 billion would seem like a profitable feat. However, that $1.6 billion actually places the company at a 49% decline from the $3.1 billion in revenue acquired in the first quarter. In a nutshell, sales have basically been sliced in half within just the brief time span between the first and second quarter. The consistent decline is relatively rapid with no apparent signs of waning anytime soon.
The revenue breakdown was based on an estimated 3.7 million Blackberry smart-phones – mostly Blackberry 7 devices. This breakdown excludes the most recently released Blackberry 10 mobile devices from the second quarter assessment as they will not be considered calculative profits until they are sold to consumers. However, the press release did reveal that only a dismal 5.9 million Blackberry smart-phones were sold to consumers during the second quarter.
While no definitive figures were released before today, Blackberry’s September 23 press release was a foreboding statement that spoke volumes. The press release announced the company’s $4.7 billion acquisition headed by a consortium in conjunction with Fairfax Financial Holding. The Canadian-based financial institution also edified Blackberry’s press release stating its intentions to buyout the downward spiraling company. The $965 million deficit definitely justifies the buyout.
Image via Wikimedia Commons