BlackBerry's Q2 earnings report as bad as it said it would be
Last Friday, BlackBerry warned the Wall Street community and the world that thanks to a write down of nearly $1 billion in BlackBerry Z10 handsets, the Canadian company would post an operating loss of more than $900 million in the second quarter. Today, a week later, BlackBerry released the actual report which showed a whopping 49% drop in quarterly revenue on a sequential basis to $1.6 billion from the first quarter's $3.1 billion. Prior to last week's warning, analysts expected BlackBerry to report second quarter revenue of $3.04 billion.
After taking a $935 million hit (right in the solar plexus) to write down inventory of the BlackBerry Z10, the company reported a second quarter GAAP loss from continuing operations of $965 million. The massive non-cash charge obviously made up the majority of the operating loss for the period. Instead of having a cash flow into the company, which BlackBerry did to the tune of $630 million for the prior quarter, the company ate up $136 million in the second quarter as cash on hand dropped to $2.6 billion from $3.1 billion.
source: AllThingsD
The company canceled the conference call that it usually holds after its quarterly earnings report. The company has agreed to a $4.7 billion purchase from a consortium led by its largest shareholder, Fairfax Financial Holdings. Should BlackBerry find a better deal, it can pull out of the current transaction and pay Fairfax a break-up fee of $157 million.
"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."-Thorsten Heins, CEO, BlackBerry
source: AllThingsD
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