BlackBerry’s total market value plunged by more than one-quarter 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 smartphones 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 US$10.46 on the NASDAQ on Friday.
The stock touched levels last seen in November last year, before the launch of its new range of smartphones early this year.
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,” IDC research vice president John Jackson said 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 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.
BlackBerry 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 said 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 US$3.1 billion as of June 1, up about US$200 million from the final quarter of the last fiscal year.
Excluding one-time items, Waterloo, Ontario-based BlackBerry reported a loss from continuing operations of US$67 million, or US$0.13 a share, on revenue of US$3.1 billion. The company said Venezuelan foreign exchange regulations had knocked about US$0.10 a share off the bottom line.
Analysts, on average, had expected a profit of US$0.06 a share, on revenue of US$3.36 billion, according to Thomson Reuters I/B/E/S.
The net loss was US$84 million, or US$0.16 a share in the quarter, down from US$518 million, or US$0.99 a share a year ago.
However, BlackBerry also reported a steep decline in revenue from its high-margin service business, the fees BlackBerry collects for providing data and security services to customers.