Feeds

BlackBerry BLOODBATH! Company warns of nearly $1bn quarterly loss

Sales way down, massive layoffs imminent

Next gen security for virtualised datacentres

BlackBerry surprised Wall Street by releasing its second quarter earnings early on Friday, but it was hardly the kind of surprise where a dancer jumps out of a cake.

The Canadian smartphone maker warned the market that it expects to post revenues of around $1.6bn when it files its formal earnings report on September 27 – a ghastly sum that's barely half the $3.06bn that the analysts polled by Yahoo! Finance were expecting.

Further salting shareholders' wounds, the company said it expects to show a net operating loss of between $950m and $995m for the quarter ending August 31. That will translate into a loss of between $0.47 and $0.51 per share, Reuters reports, more than three times worse than the $0.15 loss per share that the market-watchers expected.

How the analysts managed to miss the mark by such a wide margin isn't clear. But the simple fact is that BlackBerry's latest handsets aren't selling; it reportedly shipped around 3.7 million phones in the quarter, down from 6.8 million in the first quarter and half as many as it moved in the previous year's Q2.

Not surprisingly, BlackBerry said it will take immediate steps to put the brakes on its losses, even as its share price fell off a cliff on Friday. Despite a brief halt in trading, its shares were down 17.06 per cent by the closing bell, setting a new 52-week low.

Chart of BlackBerry (BBRY) stock performance on September 20, 2013

September 20, 2013 wasn't the best day to be a BlackBerry shareholder

As expected, layoffs are first on CEO Thorsten Heins' list of emergency measures. The company confirmed that it will issue pink slips to around 4,500 employees, equal to roughly 40 per cent of its global staff.

MarketWatch reports that BlackBerry also plans to tighten the focus of its future products to concentrate on the enterprise and "prosumer" markets. Instead of the six handsets it originally had planned, it will now produce only four, including two high-end models and two entry-level ones.

Over the long term, however, this latest devastating news is sure to add fuel to speculation that BlackBerry is an acquisition target. Microsoft is widely thought to be circling the struggling Canadian firm, having already snapped up Nokia for what many saw as a bargain price.

BlackBerry still owns valuable patents, and its mobile messaging and device management software products compete in markets that are of keen interest to Microsoft, which has struggled to gain a foothold in the smartphone arena. And even after this latest round of layoffs, there are sure to still be plenty of talented people at BlackBerry – just not, it would appear, in its marketing or sales departments. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.