BlackBerry Posts $670M Quarterly Loss

Posted by at 10:23 am on June 24, 2016

BlackBerry LogoBlackBerry is continuing to hemorrhage money, after its latest financial results show it endured a net loss of $670 million for the most recent quarter. Revenue for the Canadian smartphone producer is also poor, pulling in just $400 million over the three-month period ending in May, a year-on-year drop of 39 percent, with the balance sheet hammered by a list of adjustments and a hefty asset impairment charge pushing it into the red.

According to the results, non-GAAP revenue totaled $424 million, with software and services making up $166 million of that figure. Reuters reports only 500,000 smartphones were sold by the company during the quarter, at an average selling price of $290, though it sold 600,000 devices in the previous quarter, and 800,000 in the one before that.

The gross margin was $226 million, with operating expenses knocking the company down to a non-GAAP operating income of $14 million. Among the charges that worked against the company were a long-lived asset impairment charge of $501 million, a $57 million goodwill impairment charge, $41 million in inventory write-down, $28 million for amortization of acquired intangibles, $12 million in stock compensation expenses, and $23 million in restructuring charges.

Despite the losses, the company still has a hefty bank balance. Total cash and equivalents, as well as investments, were valued at $2.5 billion at the end of May, though when taking into account the company’s debt, the net cash balance for the end of the quarter was $1.3 billion.

CEO John Chen advised to investors that BlackBerry’s top priority for this year is to make its devices business profitable, which it is attempting to do by using a partner to produce the hardware itself. “We are at a point where our business is extremely efficient and we no longer really are making any hardware, claims Chen during the investor call, continuing “We are really a hardware design house.” Chen suggested during the last quarterly results that it would be profitable if it sold three million devices at an average price of $300. The company aims to make a decision on the devices business by September.

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