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    BlackBerry Narrowed Its Loss, but Revenue Fell in Q1

    By
    Todd R. Weiss
    -
    June 24, 2015
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      BlackBerry

      BlackBerry continues to experience mixed financial results as the company reported that it narrowed its loss for the fiscal first quarter of 2016, to $28 million from $60 million in the year-earlier period, and that its revenue in this interval fell 32 percent to $658 million from $966 million.

      The company, which announced its results June 23 in a meeting with investors and analysts, said hardware accounted for 40 percent of its revenue, while 38 percent came from services and another 21 percent from software and licensing.

      In the latest quarter, BlackBerry lost 5 cents a share, compared with 11 cents a share for the same period one year ago. BlackBerry is now a little more than halfway through a two-year effort to turn around the company’s business.

      The financial figures come after a busy product announcement period for BlackBerry. In April, it launched its $275 touch-screen Leap smartphone, which replaced the traditional BlackBerry physical keypad with a touch-screen aimed at getting the company’s devices into the hands of younger mobile professionals. In December 2014, BlackBerry launched its $449 BlackBerry Classic smartphone, which followed closely behind the company’s unveiling of its $599 BlackBerry Passport smartphone for enterprise users in September 2014.

      In March, the company announced that by the end of 2015 it will offer much of its software that today runs on its BlackBerry smartphones for use on Android, iOS and Windows smartphones and tablets as it looks to broaden its reach into the enterprise, even when companies are using competing devices. The new project, called the BlackBerry Experience Suite, is seen as a way for enterprises and small businesses to bring enterprise-class applications to their end users from a trusted partner such as BlackBerry.

      The BlackBerry Experience Suite is not yet out, so it has not yet affected the company’s financial results, but the smartphones that have come out in the last nine months have not so far helped increase its smartphone sales. That continues to be a problem for the company, especially in light of much larger recent smartphone sales figures for Apple iPhones, Samsung Galaxy phones and others.

      BlackBerry sold about 1.1 million smartphones in the first quarter of 2016, which is down about 500,000 from the previous quarter.

      Despite the revenue decline, BlackBerry CEO and Executive Chairman John Chen said in a statement that the numbers continue to show progress for the company, which only a few years ago dominated the enterprise smartphone marketplace.

      “I am pleased with the strong performance of our software and technology business,” Chen said in the statement. “This is key to BlackBerry’s future growth. Our financials reflect increased investments to sales and customer support for our software business. In addition, we are taking steps to make the handset business profitable.”

      The actions the company is taking “are prudent and necessary to grow the business and we believe the remaining milestones in our strategic plan are achievable,” Chen said.

      In March, BlackBerry reported revenue of $660 million for its fiscal 2015 fourth quarter, which ended Feb. 28, missing analyst estimates of $734.5 million, according to an earlier eWEEK report. During that quarter the company sold about 1.6 million BlackBerry smartphones. BlackBerry posted a profit of $20 million (non-GAAP), or 4 cents per share, for the quarter, beating analyst expectations of a 6-cent-per-share loss. Operating income was $2 million (non-GAAP), reversing the $156 million operating loss the company suffered in the same quarter a year earlier.

      For the full fiscal year, BlackBerry generated revenue of $3.3 billion, below analyst estimates of $3.43 billion. Losses amounted to $45 million, or 9 cents per share (non-GAAP), which exceeded the 15-cent-per-share loss that Wall Street watchers were anticipating.

      BlackBerry’s fall from dominating the enterprise smartphone market has been swift and stunning. The company spent much of 2012 and 2013 trying to shake off the image that it was finished, especially compared with its presence five years earlier when its devices were the “enterprise gold standard” for mobile business communications, according to earlier eWEEK reports. In early 2006, half of all smartphones sold were BlackBerry models. By 2009, though, its share of the global smartphone market was down to 20 percent.

      In the first quarter of 2015, BlackBerry’s worldwide market share fell to 0.3 percent, compared with 78 percent for Android and 18.3 percent for iOS, according to a recent report from IDC. Windows Phone has a 2.7 percent market share.

      Earlier this month, reports surfaced that BlackBerry is looking at the idea of running Android on a future BlackBerry smartphone as it fights to remain relevant in the marketplace, according to a previous eWEEK report. That would be a huge turnaround for the company, which historically has seen its BES enterprise software and BlackBerry operating system as key differentiators for business users.

      Todd R. Weiss
      As a technology journalist covering enterprise IT for more than 15 years, I joined eWEEK.com in September 2014 as the site's senior writer covering all things mobile. I write about smartphones, tablets, laptops, assorted mobile gadgets and services,mobile carriers and much more. I formerly was a staff writer for Computerworld.com from 2000 to 2008 and previously wrote for daily newspapers in eastern Pennsylvania. I'm an avid traveler, motorcyclist, technology lover, cook, reader, tinkerer and mechanic. I drove a yellow taxicab in college and collect toy taxis and taxi business cards from around the world.
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