BlackBerry To Cut More Costs Following Poor Earnings12:46 PM EST Fri. Sep. 27, 2013
BlackBerry reported an annual loss of $1.3 billion Friday. CEO Thorsten Heins said he was "very disappointed" and told investors "a series of major changes" are in motion to address the continual downward spiral. The loss exceeds the $995 million in losses BlackBerry expected to report as of Friday last week.
Following the further plunge in revenue and market share, the company said it will take a $934 pretax writedown, accounting for unsold inventory. In addition, 4,500 BlackBerry employees will be let go, a sign the company is serious about restructuring and narrowing its focus.
Fairfax Financial Holdings, an investing company with a current 10 percent stake in BlackBerry, offered a $4.7 billion deal in conjunction with other investors on Monday to take the company private. BlackBerry is reportedly considering the deal but has until Nov. 4 to consider other options.
The Fairfax deal offers $9 per market share. Thursday morning BlackBerry stock was reported at $7.95 before raising to $8.09 this morning, according to a Bloomberg report.
Heins issued forward-looking statements with high hopes around increased adoption of the BES 10 mobile device management solution for enterprise.
"We continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013," Heins said.
Hardware accounted for 49 percent of the company's quarterly earnings, while services accounted for 46 percent and software for only 5 percent.
According to BlackBerry's financial report, the company sold approximately 5.9 million BlackBerry smartphones during the quarter, recognizing revenue on 3.7 million smartphones, the majority being BlackBerry 7 devices.
Heins continued to reassure investors that BlackBerry "remains 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."
PUBLISHED SEPT. 27, 2013