BlackBerry posts $423 million net loss in fourth quarter

Written by PTI | New York | Updated: Mar 29 2014, 03:17am hrs
BBlackBerry's revenue declined 64 pct to $976 mn in Dec-Feb from $2.7 bn in the same quarter a year ago. PTI
Struggling Canadian smartphone maker BlackBerry today reported a net loss of USD 423 million in the fiscal fourth quarter.

The company based in Waterloo, Ontario, had posted a profit of USD 98 million in the December-February quarter a year earlier and a USD 4.4 billion loss in September-November.

Revenue declined 64 per cent to USD 976 million in December-February from USD 2.7 billion in the same quarter a year ago, it said in a statement. Revenue fell 18 per cent from USD 1.2 billion in the third quarter.

"We have significantly streamlined operations, allowing us to reach our expense reduction target one quarter ahead of schedule," Chief Executive Officer John Chen said.

BlackBerry is on a sounder financial footing today with a path to returning to growth and profitability, he added.

"I am very pleased with our progress and execution in fiscal Q4 against the strategy we laid out three months ago," said Chen, who took over in November.

The firm sold about 3.4 million smartphones, including shipments made and recognised prior to the fourth quarter, which reduced the company's inventory in channel, it said.

"Of the BlackBerry smartphones sold through to end customers in the fourth quarter, approximately 2.3 million were BlackBerry 7 devices," the firm added.

Total of cash, cash equivalents, short-term and long-term investments was about USD 2.7 billion on March 1, from USD 3.2 billion at the end of the previous quarter.

"The company anticipates maintaining its strong cash position and continuing to look for opportunities to streamline operations. The company is targeting break even cash flow results by the end of fiscal 2015," BlackBerry said.

During the quarter, BlackBerry incurred charges related to its Cost Optimization and Resource Efficiency (CORE) programme of about USD 148 million pre-tax or USD 105 million after tax.

Substantially all of the pre-tax charges were related to one-time employee termination benefits, facilities and manufacturing costs.

It started the CORE programme in 2012 to streamline operations and increase efficiency, including optimising manufacturing, outsource global repair services and reduce its workforce.

The firm said it would cut 4,500 positions globally to bring the workforce to about 7,000 full-time people.

BlackBerry follows a March-February financial year and the results are based on US Generally Accepted Accounting Principles.

For the full financial year, the net loss widened to USD 5.9 billion from USD 646 million in the previous year while revenue fell 38 per cent to USD 6.8 billion.

During fiscal 2014, Blackberry incurred about USD 512 million in pre-tax charges related to the CORE programme and strategic review process.

During Q4, the company recorded a recovery of previous charges against inventory and supply commitments of about USD 149 million (USD 106 million after tax).

BlackBerry said the charges reflect increased sell through rates, relative to previous estimates and assumptions, resulting from discounted pricing and revised orders on hand for devices and components of BlackBerry 10 products.

During Q3, the firm had non-cash, pre-tax charges against inventory and supply commitments of about USD 1.6 billion, primarily attributable to BlackBerry 10 devices.

Once a leader in the global smartphone market, BlackBerry lost market share steadily and now trails Samsung and Apple.

Last month, BlackBerry said it would sell most of its real estate holding in Canada to improve operational efficiencies in the face of mounting losses and unsold handset inventory.

It also sold its US headquarters at Irving, Texas, to Canadian Brookfield Property Group.

The move was seen as a part of broader efforts to conserve cash and fund turnaround efforts amid intense competition from Apple's iOS and Google's Android operating system-based smartphones.