BlackBerry endured a catastrophic second quarter as today it announced a $965m loss in those three months. Its revenue from the period was half of the first-quarter takings and half of last year's second-quarter revenue.
BlackBerry cancelled its conference with analysts that traditionally accompanies these quarterly results - but the phone maker is still legally obliged to publish its financial results while it's a publicly traded company. It had little to add from last week's shock earnings warning, however.
The Company Formerly Known As RIM recorded revenue of $1.6bn in Q2, down 49 per cent from the $3.1bn it banked in Q1. It said 5.9m BlackBerrys were sold, almost all of which were devices running its venerable BB OS 7 - and it will not recognise revenue from sales of devices that use its new BB OS 10.
Instead, it's taking an inventory charge of $934m to reflect the true asset value of its new yet unsold Z10 touchscreen handsets. As a result, BlackBerry made a loss of $965m in the quarter. Little detail was added beyond what it had disclosed in an unexpected pre-earnings statement last Friday.
It appears that the company completely miscalculated the demand for its new devices powered by BB OS 10 (which isn't actually too bad) - and continued to manufacture Z10s even though demand fell away after an initial spurt of interest. RIM acquired the embedded microkernel operating system QNX in 2010 to plug into its gadgets, and the first BlackBerrys based on the software had been expected in 2011 - but delays pushed the official launch back to January 2013.
The company also failed to launch devices at the low price points many wannabe BlackBerry owners expected, and last week the biz announced a withdrawal from the consumer market altogether.
On Monday, the BlackBerry board announced it was accepting a bid organised by its largest shareholder Fairfax Holdings to take the company private. The bid values the company at $4.7bn. Since BlackBerry said today it retains cash and investments worth $2.6bn, it shows how little confidence the board has in its value. ®