BlackBerry Shares Tank 23 Percent on Dismal Earnings
BlackBerry's latest quarterly numbers disappointed Friday, sending shares into a 24 percent pre-market dive, as the Canadian OEM missed analyst estimates, proving just how competitive the current smartphone market really is.
Perhaps most disappointing was reported smartphone shipments for the company's first quarter of fiscal 2014, which came in at 6.8 million. Just 2.7 million of those smartphones shipped were BB10 devices. BlackBerry said it sold 100,000 BlackBerry PlayBook tablets.
The company managed to shore up its net losses to $84 million, which compared to $518 million in the same quarter last year.
BlackBerry reported revenue of $3.1 billion. That's up 15 percent from $2.7 billion in the previous quarter and up 9 percent from $2.8 billion in the same quarter of fiscal 2013. The company said revenue for the quarter broke out to 71 percent hardware, 26 percent for service and 3 percent for software and other revenue.
In an earnings call broadcast on the company's website, CEO Thorsten Heins attempted to downplay BlackBerry's dependence on devices.
"We don't plant to run the company with a short-term, device-only strategy," Heins said, touting BlackBerry Enterprise Service (BES), and its consumer-facing BlackBerry Messenger, which recently went cross-platform on iOS and Android, as points of diversity for the company.
Industry analyst Jeff Kagan said the quarter's results dim hopes that the company's new line of BB10 devices can turn things around for the ailing device maker.
"I can't imagine anyone is happy with Blackberry performance except maybe Blackberry competitors," Kagan said in emailed comments.
Kagan said BlackBerry had drifted too far from the expectations of its core customer base with its new operating system.
"What Blackberry should have done was create at least one device which was just as familiar as the old devices customers loved, but had new features as well. That would have been a successful approach," he said.
As of 9:00 a.m. ET, share of BlackBerry were trading down 23.9 percent to $11.02 in pre-market trading.