BlackBerry smartphones to end users. BlackBerry said it is changing the way it accounts for device sales, now booking revenue only after a device is sold to the end customer, and not to carriers.
Worryingly, most of the unit sales being recognized in the quarter are older-generation BlackBerry 7 devices. The company said it could not recognize BlackBerry 10 devices shipped in the quarter until those devices are sold through to end customers. That suggests carriers have been having difficulty moving the new line of devices.
MAJOR JOB CUTS
BlackBerry said it expects its adjusted net loss, before giving effect to the inventory and restructuring provisions, will be in a range of about $250 million to $265 million, or a loss of 47 cents to 51 cents a share.
BlackBerry sees about $1.6 billion of revenue in the second quarter, of which roughly 50 percent is expected to be revenue from its services unit.
Analysts, on average, had forecast a loss of 15 cents a share on revenue of $3.06 billion, according to Thomson Reuters I/B/E/S.
"The revenue and device shipment numbers are pretty surprising given how weak it is," said UBS analyst Passi. "I think many of us were expecting a pretty difficult quarter, but this is much worse than we anticipated."
The company, which had warned that job cuts were in the offing, plans to shed 4,500 jobs. BlackBerry has already undergone a major round of job cuts over the last 12 months. It employed 12,700 people as of March, and once had close to 20,000 employees.
BlackBerry said its cash position as of the end of the fiscal second quarter is estimated to be about $2.6 billion, down from about $3.1 billion three months earlier.
"It makes it even more difficult for somebody to step in and buy the company. If you look at what's been happening, they've burnt through approximately half a billion dollars in cash in the last three months," said Veritas Investment Research analyst Neeraj Monga.