BlackBerry ends write-off of a year with $4.4bn write-down

FoxConn deal means it moves to design


BlackBerry announced a whopping non-cash charge on its assets of $4.4bn in its earnings statement today. The company booked a loss of $354m on income of $1.2bn, the result of a continuing collapse in handset sales.

In Q2 this year BlackBerry lost $254m on sales of $1.6bn. BlackBerry will continue selling BlackBerrys, but much more cheaply: it announced a five year manufacturing deal with FoxConn and will focus on creating the software for the devices, and "iconic design".

2013 had been billed as the year of BlackBerry's comeback, as it introduced a shiny new OS and freed itself from the proprietary entanglements of the past. But the year ends with revenue that's down from $2.7bn in the same quarter last year. The company sold-through (as opposed to shipped into the channel) just 1.1 million BB10 devices and 3.2 million older BlackBerry smartphones in the quarter, compared to a sell-through of 8.4 million in the same period twelve months ago.

The $4.4bn figure is comprised of two impairment charges - which indicate a reduction in the company's capital - of $2.7bn and $1.6bn (less after tax) including inventory charges, and $266m for the ongoing cost reduction programme and the strategic review process.

That strategic review was expected to conclude with one of two things: either a partnership with a friendly, wealthier partner, or with the company going private. In the end neither happened and the continuing uncertainty made global headlines. This uncertainty surrounding this surely crippled sales.

BlackBerry's new chairman, Prem Watsa, injected almost $1bn of cash (by selling debt) into the company but at current burn rates it won't last the year. The Canadian pioneer has increased its cash pile however: it's now $3.2bn, up $0.6bn from Q2.

The problem is, shutting down the parts of BlackBerry that lose the most money is also expensive. Even extricating itself from contracts with suppliers for products nobody wants is expensive:

"Purchase obligations and commitments amounted to approximately $2.1 billion as at November 30, 2013, with purchase orders with contract manufacturers representing approximately $664 million of the total," the company noted.

On the positive side - and there isn't much of one - BBM now has 40 million users on Android and iOS. A little more good news should follow as it has made BES10, now maturing into a comprehensive product, much easier to adopt for existing BES owners.

Full statement is here. ®

Similar topics


Other stories you might like

  • DigitalOcean tries to take sting out of price hike with $4 VM
    Cloud biz says it is reacting to customer mix largely shifting from lone devs to SMEs

    DigitalOcean attempted to lessen the sting of higher prices this week by announcing a cut-rate instance aimed at developers and hobbyists.

    The $4-a-month droplet — what the infrastructure-as-a-service outfit calls its virtual machines — pairs a single virtual CPU with 512 MB of memory, 10 GB of SSD storage, and 500 GB a month in network bandwidth.

    The launch comes as DigitalOcean plans a sweeping price hike across much of its product portfolio, effective July 1. On the low-end, most instances will see pricing increase between $1 and $16 a month, but on the high-end, some products will see increases of as much as $120 in the case of DigitalOceans’ top-tier storage-optimized virtual machines.

    Continue reading
  • GPL legal battle: Vizio told by judge it will have to answer breach-of-contract claims
    Fine-print crucially deemed contractual agreement as well as copyright license in smartTV source-code case

    The Software Freedom Conservancy (SFC) has won a significant legal victory in its ongoing effort to force Vizio to publish the source code of its SmartCast TV software, which is said to contain GPLv2 and LGPLv2.1 copyleft-licensed components.

    SFC sued Vizio, claiming it was in breach of contract by failing to obey the terms of the GPLv2 and LGPLv2.1 licenses that require source code to be made public when certain conditions are met, and sought declaratory relief on behalf of Vizio TV owners. SFC wanted its breach-of-contract arguments to be heard by the Orange County Superior Court in California, though Vizio kicked the matter up to the district court level in central California where it hoped to avoid the contract issue and defend its corner using just federal copyright law.

    On Friday, Federal District Judge Josephine Staton sided with SFC and granted its motion to send its lawsuit back to superior court. To do so, Judge Staton had to decide whether or not the federal Copyright Act preempted the SFC's breach-of-contract allegations; in the end, she decided it didn't.

    Continue reading
  • US brings first-of-its-kind criminal charges of Bitcoin-based sanctions-busting
    Citizen allegedly moved $10m-plus in BTC into banned nation

    US prosecutors have accused an American citizen of illegally funneling more than $10 million in Bitcoin into an economically sanctioned country.

    It's said the resulting criminal charges of sanctions busting through the use of cryptocurrency are the first of their kind to be brought in the US.

    Under the United States' International Emergency Economic Powers Act (IEEA), it is illegal for a citizen or institution within the US to transfer funds, directly or indirectly, to a sanctioned country, such as Iran, Cuba, North Korea, or Russia. If there is evidence the IEEA was willfully violated, a criminal case should follow. If an individual or financial exchange was unwittingly involved in evading sanctions, they may be subject to civil action. 

    Continue reading

Biting the hand that feeds IT © 1998–2022