BlackBerry’s total market value plunged by more than one-fourth on Friday after the smartphone maker reported dismal quarterly results, prompting ever-deeper skepticism about a long-promised turnaround.
BlackBerry, which has struggled to claw back market share from the likes of Apple Inc’s iPhone, Samsung Electronics Co Ltd’s Galaxy phones and other devices powered by Google Inc’s Android operating system, reported a loss in the fiscal first quarter ended June 1, and sales of its make-or-break new line of devices were softer than expected.
The company also said it will not make an operating profit in the current quarter.
Shares of BlackBerry, which changed its name from Research in Motion, closed 27.8 percent lower at $10.46 on the Nasdaq on Friday. The stock touched levels last seen in November 2012, before the early 2013 launch of the new range of smartphones.
Some analysts believe that potential buyers may take a look at BlackBerry, given assets that include a wealth of valuable patents, as well as hardware and service businesses.
“If you look at the asset base that they have at their disposal, it’s formidable,” said John Jackson, research vice president for IDC, in response to a question on Reuters Television. “So there are any number of companies that might have an interest in RIM’s assets if indeed it’s in play.”
Macquarie analyst Kevin Smithen cut his rating on BlackBerry to “underperform” from “neutral” and said he sees a breakup or sale of the company as a likely end game.
BlackBerry invented the concept of on-the-go email more than a decade ago with clunky little devices with a mini keyboard. The gadgets, which offered powerful security features, allowed the company to corner the lucrative market serving business and legal professionals as well as government workers.
But many in that market are now moving to other devices, leaving BlackBerry struggling to make its mark both at the top and the bottom of a competitive smartphone market.
Staying the course
BlackBerry said it shipped 6.8 million smartphones in the quarter, including about 2.7 million BB10 devices. This fell shy of market expectations of more than 3 million shipments for its new Z10 and Q10 smartphones. The first-quarter results and revenue figures also missed analyst estimates.
By comparison, Apple shipped 37.4 million iPhones in the March quarter, up from 35.1 million a year ago.
Chief Executive Thorsten Heins said it would take “at least a few quarters” to turn BlackBerry around and he insisted the company would stay the course.
“We’re not sitting here devastated or destroyed,” Heins told Reuters in an interview after the results came out. “In my view, given where we are with the portfolio and the roll-out, it actually was a good quarter.”
On the bright side, BlackBerry’s cash position rose to $3.1 billion as of June 1, up about $200 million from the final quarter of the last fiscal year. The company has no debt.
Excluding one-time items, Waterloo, Ontario-based BlackBerry reported a loss from continuing operations of $67 million, or 13 cents a share, on revenue of $3.1 billion. The company said Venezuelan foreign exchange regulations had knocked some 10 cents a share off the bottom line.