Canadian handset manufacturer
) reported highly disappointing financial results for the second
quarter of fiscal 2014. Both the top and the bottom lines
significantly fell below the Zacks Consensus Estimate.
The disappointing figures follow Blackberry's announcement last
week of its plans to cut 4,500 workforce. The announcement had
come with a warning that it may report a huge second quarter
operating loss. BlackBerry's efforts for revival banking on
operating platform BB10 also failed and so did its latest
handset. BlackBerry currently has a Zacks Rank #3 (Hold).
Second Quarter Results in Detail
Adjusted net loss from continuing operations in the second
quarter of fiscal 2014 was $914 million or $1.74 per share
compared with a net loss of $84 million or 16 cents per share in
the year-ago quarter. The adjusted net loss per share of $1.74
was also significantly wider than the Zacks Consensus Estimate of
a loss of 50 cents per share.
Total revenue in the reported quarter was $1,573 million, down
48.8% year over year. Revenues also missed the Zacks Consensus
Estimate of $1,743 million. Segment wise, Hardware revenues
contributed approximately 49%, Services revenues accounted for
46% and the remaining 5% came from Software and other sources.
In the reported quarter, BlackBerry sold 3.7 million smartphones.
Quarterly operating loss was $1,432 million compared with an
operating loss of $169 million in the year-ago quarter.
In the second quarter of fiscal 2014, BlackBerry generated $486
million of cash from operations compared with $1,135 million in
the prior-year quarter. Free cash flow in the reported quarter
was $291 million compared with $895 million in the year-ago
quarter. Cash and marketable securities at the end of the second
quarter were $2,344 million compared with $2,654 million at the
end of fiscal 2013. The balance sheet of BlackBerry remains debt
) iPhone hit the market, BlackBerry and
) have been facing competitive pressures, which BlackBerry in
particular have found tough to deal with. The situation further
) launched its Android software and several handset manufacturers
adopted that operating system.
Meanwhile, BlackBerry has decided to go private by divesting its
entire stake to a consortium headed by Toronto-based insurance
company Fairfax Financial Holdings Limited for $4.7 billion or $9
per share. Moreover, the company has also decided to offer its
popular BBM service to Android and iPhone users.
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