Sunday, 22 December 2013

BlackBerry Reports $4.4 Billion Loss Last Quarter, Signs Deal With Foxconn

 BlackBerry has announced its earnings for the third quarter of 2013 reporting a staggering loss of $4.4 billion.

GAAP loss from continuing operations was $4.4 billion or $8.37 per share diluted. The loss includes a non-cash pre-tax charge against long lived assets of $2.7 billion, a primary non-cash pre-tax charge against inventory and supply commitments of $1.6 billion, and pre-tax restructuring, legal and financial advisory charges of about $266 million. This compares with a GAAP loss from continuing operations of $965 million, or $1.84 per share diluted in the prior quarter, and GAAP income from continuing operations of $14 million, or $0.03 per share diluted, in the same quarter last year.

BlackBerry's new CEO John Chen, who has been hired to try and turn around the company, said "With the operational and organizational changes we have announced, BlackBerry has established a clear roadmap that will allow it to target a return to improved financial performance in the coming year. While our Enterprise Services, Messaging and QNX Embedded businesses are already well-positioned to compete in their markets, the most immediate challenge for the Company is how to transition the
Devices operations to a more profitable business model."

Chen added: "We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year. However, the Company is financially strong, has a broad and trusted product portfolio to work with, a talented employee base and a new leadership team dedicated to implementing our new roadmap."

Notably, the company has also announced a five year partnership with Foxconn.

Under this new relationship, Foxconn will jointly develop and manufacture certain new BlackBerry devices and manage the inventory associated with those devices. The initial focus of the partnership will be a smartphone for Indonesia and other fast-growing markets targeting early 2014.

“This partnership demonstrates BlackBerry’s commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions,” said Chen. “Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively.”

BlackBerry will own all of its intellectual property and perform product assurance on devices through the Foxconn partnership, as it does currently with all third-party manufacturers.

“BlackBerry is an iconic brand with great technology and a loyal international fan base,” said Terry Gou, Founder and Chairman, Foxconn. “We are pleased to be working with BlackBerry as it positions itself for future growth and we look forward to a successful strategic partnership in which Foxconn will jointly develop and manufacture new BlackBerry devices in both Indonesia and Mexico for new and existing markets.”

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