The total market value of BlackBerry plunged by about 1/4th on Friday when the maker of smartphone reported discouraging quarterly results, thereby prompting deep skepticism regarding the turnaround that was long-promised.
BlackBerry struggled before to get back the share in market from likes of iPhone, Galaxy phones along with other devices by Android system, powered by Google. It has now reported loss in fiscal 1st quarter that ended this June, and the sales of its new line turned out lesser than were expected.Also, the company said that it wouldn’t make operating profit during this current quarter.
The BlackBerry shares closed on Friday on Nasdaq at $10.46 being 27.8% low. Stock did touch levels in November last year, before early launch of smartphones’ new range in 2013.
There are some analysts who believe potential buyers might take look at the BlackBerry and the assets which include wealth from valuable patents along with service and hardware businesses.
IDC’s vice president of research, John Jackson, said that it’s formidable if one looks at the asset base at disposal but if that is what many companies are looking for, they would probably have interest assets of RIM.
It’s over a decade ago that concept of e-mailing as one moves around, was invented, with little clunky devices with mini keyboard. Gadgets that offered powerful features of security allowed company to have lucrative market that serves legal and business professionals cornered, along with government workers.
But there are many out there who have moved to other smartphones leaving BlackBerry to its struggle of making its mark.
Staying In Business:
According to BlacckBerry, in this quarter it shipped 6.8M smartphones, including around 2.7M BB10 devices. It was quite below the market expectations that were above 3M shipments for the new Q10 and Z10 smartphones. Results of the first-quarter as well as revenue figures didn’t also meet the estimates by analysts.
Meanwhile, 37.4M iPhones were shipped by Apple in March quarter that was up from the figure of 35.1M previous year.
Thorsten Heins, the CE said that it’d take minimum some quarters for BlackBerry to turn around and also he insisted that the company will stay in business.
Heins told that they weren’t sitting there all destroyed and that given where they were with portfolio, actually it happened to be good quarter.
Towards bright side, the cash position of BlackBerry rose to around $3.1bn by 1st June, up by $200M from previous fiscal year’s final quarter. Company doesn’t have any debt.
Excluding items for one-time, BlackBerry which is Ontario-based reported loss from its continuing operations amounting to $67M, 13 cents per share. Company said that Venezuelan regulations of foreign exchange knocked around 10 cents for each share off bottom line.
On average, the analysts had expected profit of about 6 cents for each share, with $3.36bn revenue.
Net loss amounted to $84M, down from the $518M the previous year.
Steep decline is reported by BlackBerry in revenue in its service business of high margin which is the fees that BlackBerry takes to provide security and data services to the customers. That fee was speculated to fall. Though Venezuelan curbs had meant that decline tended to be steeper than what was forecasted, according to BlackBerry.
The Murky Outlook:
2 latest BB10 smartphones were launched this year: Z10 touch screen device as well as Q10 that includes mini keyboard and also less costly keyboard Q5 device that is targeted at the emerging markets.
It was only in the late March that Z10 hit the store shelves of the important U.S. market, while Q10 device got into U.S. after the end of quarter.BlackBerry has also planned on unveiling a low priced phone according to the platform of old BlackBerry7 later in this year.
Any detailed outlook wasn’t provided by BlackBerry for the remaining year, giving the reason that market of smartphone was highly competitive so estimating any revenues, units of profitability levels is difficult.
According to an analyst, latest results depict that transformations would take time and that the results don’t reflect that BlackBerry wouldn’t be capable of succeeding, but instead the success might be quite further than anticipated and advantages might cost much upfront as company heavily invests.