If you want a scary story this holiday season for anyone in business, just read them BlackBerry’s latest quarterly earnings.
The struggling phone maker announced a huge $4.4 billion loss for the third quarter of 2014, along with a staggering revenue drop of 56 percent from last year (reaching only $1.6 billion).
Ironically, that loss is close to the $4.7 billion Fairfax Holdings was offering BlackBerry to buy it out. BlackBerry declined that offer. It instead raised $1 billion from Fairfax and other investors to refocus its business on the enterprise. The company also fired CEO Thorsten Heins and replaced him with John Chen, a former CEO of Sybase.
At this point, BlackBerry is like a zombie lumbering through the smartphone landscape, slowly chomping on the brains of investors and its few remaining fans. But at least it’s more interesting than The Walking Dead.
BlackBerry executives described the company as “financially very strong” in its earnings call today. And somewhat controversially, its new CEO also estimated that it will stem its losses by the end of fiscal year 2015 and actually generate a profit by fiscal year 2016. BlackBerry ended the quarter with $3.2 billion in cash, up from $2.6 billion last quarter.
Inexplicably, BlackBerry’s stock is actually up 2.6 percent at the time of this post.
The company only saw revenue from 1.9 million smartphones during the quarter (meaning those were devices actually shipped to retailers), down from 3.7 million phones last quarter. And once again, it’s mainly making money from aging BlackBerry 7 devices, not the new BlackBerry 10 phones that were supposed to help save it. The company sold a total of 4.3 million smartphones during the quarter (many of which were already at retailers, so they don’t count toward this quarter’s shipments), 3.2 million of which were BB7 devices.
Amid the disastrous news, BlackBerry saw a few signs of hope: It now has 40 million BlackBerry Messenger (BBM) users on iOS and Android, and it has scored deals with more than a dozen Android phone makers to preload the BBM apps on their phones. It’s unclear how BlackBerry will make money from those folk, but this at least gives the company a way to keep its brand alive.
BlackBerry says it plans to announce new car and cloud products from its QNX-embedded business division at CES next month. BlackBerry Enterprise Service 10 (BES) deployments have now reached 30,000 businesses, up from 25,000 in September.
Additionally, BlackBerry announced a five-year partnership with Foxconn, the Taiwanese electronics manufacturer that Apple and other electronics companies use, to jointly develop and build some upcoming budget smartphones. Chen expects those phones to launch around March or April 2014.