BlackBerry’s president and CEO acknowledges disappointing Q2 results

27 Sep 2013

Thorsten Heins, president and CEO of BlackBerry

Smartphone maker BlackBerry’s president and CEO Thorsten Heins has expressed disappointment with the company’s second-quarter financial results that show a 49pc drop in revenue from US$3.1bn in the previous quarter to US$1.6bn, and a decrease of 45pc from US$2.9bn in the same quarter of fiscal 2013.

“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” Heins said.

BlackBerry’s revenue breakdown for the quarter for the three months ended 31 August is about 49pc for hardware, 46pc for service and 5pc for software and other revenue.

BlackBerry’s adjusted loss from continuing operations amounted to US$248m, or US$0.47 a share.

GAAP loss from continuing operations totalled US$965m, including a mostly non-cash charge of US$934m pertaining to poor sales of the new Z10 phone.

The company sold 5.9m BlackBerry smartphones during the second quarter.

Heins said that while the company goes through changes to create the best business model for its hardware business, it continues to see confidence from its customers through the increasing penetration of BES (BlackBerry Enterprise Server) 10, where it now has more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013.

“We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with US$2.6bn in cash and no debt,” said Heins.

“We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company.”

BlackBerry recently signed an agreement to enter into a six-week due diligence period with a consortium led by Fairfax Financial Holdings, which aims to acquire the company for around US$4.7bn.

The company had also announced a plan to reduce its workforce by 40pc – some 4,500 workers –to refine its smartphone range down to four models, and to make the Z10 available to a broader and younger audience.

Tina Costanza was a journalist and sub-editor at Silicon Republic