Blackberry results see shares tumble

Thorsten Heins, CEO of Blackberry's parent company Research in Motion. Picture: AFP
Thorsten Heins, CEO of Blackberry's parent company Research in Motion. Picture: AFP
Share this article
1
Have your say

SHARES in smartphone maker BlackBerry tumbled in early US trading yesterday after quarterly results showed its latest devices failed to generate a profit.

The Canadian firm, which has lost ground to rivals Apple and Samsung in recent years, is trying to regain its position as one of the market leaders with updated versions of its iconic keyboard-based design.

Early sales had looked promising but the company disappointed Wall Street with results for its financial first quarter showing a net loss of $84 million (£55m).

Although that compares favourably with the $518m deficit reported a year ago, analysts had pencilled in a slim profit for the three months to 1 June as the firm’s touch-screen Z10 device was launched in a number of global markets.

BlackBerry is also hoping to appeal to die-hard fans looking for an upgrade with the Q10, which retains its famous mini keyboard as well as touch screen features. The Z10 hit the shelves in the US in late March, while the Q10 device only reached the US after the end of BlackBerry’s fiscal first quarter.

Ever more sophisticated touch-screen smartphones such as Apple’s iPhone and Samsung’s Galaxy range, as well as a raft of devices powered by Google’s Android operating system, had put BlackBerry’s unique but aging style in the shade by last year and forced the company deep into the red.

The group is banking on the new devices to turn around its fortunes and investors were unhappy that the firm provided scant details of how sales of the make-or-break models were progressing.

To make matters worse, it warned that the “competitive market” and the cost of launching and marketing the new devices meant it anticipated racking up another loss at the operating level in its second quarter.

Brian Colello, an analyst with Morningstar, said: “We haven’t received the BlackBerry 10 unit numbers yet, but certainly it doesn’t bode well for the initial launch, particularly the Z10.

“The outlook for a second quarter loss doesn’t bode well for the Q10 either.”

BlackBerry also fell short of expectations in revenue terms, booking $3.1 billion of sales in the quarter – about $250m shy of most forecasts.

The group shipped 6.8 million smartphones over the three months, up 13 per cent quarter-on-quarter, but it did not say how many of them were BlackBerry 10 devices. Analysts said the shipment numbers indicated sales of the new devices have not yet been as good as investors had hoped.

Chief executive Thorsten Heins said the roll-out was “still in the early stages”.

He added: “Over the next three quarters, we will be increasing our investments to support the roll out of new products and services, and to demonstrate that BlackBerry has established itself as a leading and vibrant player in next generation mobile computing solutions for both consumer and enterprise customers.”