BlackBerry today released its third quarter financial report and the results are about as dire as everyone expected.
BlackBerry is reporting a $4.4 billion loss today, illustrating just how dire the situation is for the Canadian tech company. Over half of that loss ($2.4 billion) comes as part of a long-lived asset adjustment charge and over $1.3 billion related to an inventory charge. This translated over the quarter into an $8.37 loss per share.
As the inventory charge suggests, BlackBerry posted dismal revenue numbers for the third quarter. The company’s revenue for the past quarter was just shy of $1.2 billion – a 56% drop in revenue from the third quarter of 2012.
That BlackBerry’s higher third quarter 2012 revenue was posted before the company ever released its BlackBerry 10 smartphones demonstrates how large a failure BlackBerry 10 truly is. The company estimates that it sold 1.9 million BlackBerry devices during the previous quarter – with “most” of them being older BlackBerry 7 devices. That’s nearly half the 3.7 million devices the company sold during this year’s second quarter.
The BlackBerry 10 failure became apparent to investors after its $965 million second-quarter loss, and BlackBerry soon after announced its intention to be acquired for $4.7 billion by an investment consortium led by FaiFax Financial Holdings. That buyout fell through and the BlackBerry board quickly booted CEO Thorsten Heins, announcing plans for a reorganization. Throughout all of this BlackBerry has continued to downsize its workforce with layoffs that have been taking place for over one year now.
BlackBerry’s interim CEO John Chen has made it clear that he will be making sweeping changes to the way BlackBerry does business. Instead of the high-end smartphone market, the company will focus on its core business of mobile enterprise services.
“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 Chen. “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.
“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.”