Mobile phone maker BlackBerry on Friday released their financial results for the second quarter for the three months ended August 31, 2013, and highlighted a massive loss in revenue.
The company posted a 49% loss from $3.1 billion in the previous quarter to approximately $1.6 billion and down 45% from $2.9 billion in the same quarter of fiscal 2013.
“The revenue breakdown for the quarter was approximately 49% for hardware, 46% for service and 5% for software and other revenue. During the second quarter the company recognized hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers,” the company said in a statement.
BlackBerry also confirmed that almost 6-million smartphone were sold in the quarter. “During the quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in the channel.”
The financial results also included a $934-million Z10 Inventory Charge of unsold units, which BlackBerry had to write off for the quarter. “The adjusted loss from continuing operations and adjusted diluted loss per share exclude the impact of the Z10 Inventory Charge of approximately $934 million ($666 million after tax) and pre-tax restructuring charges of approximately $72 million ($51 million after tax) related to the CORE program incurred in the second quarter of fiscal 2014.”
Although the company’s revenue is down 49%, Thorsten Heins, President and CEO of BlackBerry believes the company is still financially strong. “We understand how some of the activities we are going through create uncertainty, but we remain 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,” he said in a statement.
Heins also voiced his concern over the financial results. “We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” he said.
Charlie Fripp – Consumer Tech editor