BlackBerry confirms dreadful Q2 results ahead of possible sale
BlackBerry has confirmed second quarter losses of $965 million (£598m) ahead of a possible sale of the company to a consortium led by its largest shareholder, Fairfax Holdings.
The struggling Canadian smartphone manufacturer had warned of the loss last week and slashed 4,500 jobs, or 40 percent of its global workforce, as it attempted to make itself more attractive to potential buyers.
It posted revenues of $1.6 billion during the period, a massive 49 percent drop from the $2.9 billion it made this time last year, with smartphone sales dropping from 7.4 million to 3.7 million, with the majority being BlackBerry 7-powered. BlackBerry says it actually shipped 5.9 million units, but could only recognise the smaller figure because not all of the BlackBerry 10 devices had reached users.
Hardware sales accounted for 49 percent of revenue, with services amounting to 46 percent, a proportion that is likely to rise in the future as BlackBerry rationalises its smartphone portfolio in order to focus on enterprise solutions.
In a rare piece of good news for BlackBerry, it said it had increased the number of BlackBerry Enterprise Service 10 (BES 10) servers from 19,000 in July to 25,000.
CEO Thorsten Heins said he was “very disappointed” with the results and that the company had announced a series of major changes as a result.
“While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10,” he said. “We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company.”
BlackBerry was once widely considered the market leader in enterprise smartphones, but has seen its share eroded by the likes of Apple and Samsung devices which can offer many of the same security and administration features.
Its hopes of a recovery rested on a successful launch of smartphones running the BlackBerry 10 operating system, but sales have been disappointing and the company announced last month it had formed a committee to evaluate the company’s strategic alternatives going forward, including putting itself up for sale.
Last week, BlackBerry announced it had reached a preliminary deal with Fairfax to sell the company for $4.7 billion (£2.9bn). Fairfax has until 4 October to complete due diligence, during which BlackBerry can entertain other offers, something it might have to, given the doubts surrounding the consortiums ability to raise the required funds.
BlackBerry has had a bumpy year! Try our 2013 BlackBerry quiz!