BlackBerry Ltd (NASDAQ:BBRY), the struggling smartphone maker posted a massive loss of $965 million, or $1.84 a share for the second quarter compared to a loss of $229 million, or 44 cents a share, for the same period last year. The Canadian firm told that it is burning cash at a brisk pace, and is in the process to decide on a potential offer to take the company private.
Thorsten Heins, BlackBerry chief expressing his concern said “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 further added, though some of the “activities” company is into creates “uncertainty,” but still the company is financially sound with $2.6 billion in cash and no debt.
Earnings lower than expected
For the quarter ended August 31, the smartphone maker reported revenues of $1.6 billion against $2.9 billion, for the same quarter last year. BlackBerry also announced that during the quarter it used around $136 million in cash compared to $630 million in cash flow from operations in the last quarter.
On adjusted basis, per-share loss from continuing operations came in at 47 cents per share, which is below the analyst’s expectation of 49 cents a share. BlackBerry, at the time of announcing preliminary results and lay off plans, warned about the huge loss, which it expected to be between 47 cent-to-51-cent losses. The company also reported pretax restructuring expenses of $72 million.
The Waterloo based firm revealed that, over the past three months, it sold 5.9 million BlackBerry smartphones, though revenue is only recorded on 3.7 million of them.
Cancelled earnings call
BlackBerry, which was once the most preferred choice of corporate, is now even struggling to stay in competition. Lower than expected demand of its new line of BlackBerry 10 devices and the intense competition from two of the biggest brand in the segment, Apple and Samsung, has left the Canadian firm to look for other strategic alternatives including taking the company private.
Earlier this week, a consortium led by Fairfax Financial Holdings Chairman Prem Watsa, the company’s largest stockholder, offered $9-a-share (valuing BlackBerry at $4.7 billion) to take the Canadian firm private.
BlackBerry also cancelled the earnings call, scheduled Friday, to discuss the quarterly results citing the tentative buyout offer from the consortium. Instead, the company told that management discussion and analysis of the quarterly results will be available next week.