Black Day for BlackBerry: Stock Falls 20% on Dismal Financial Update
BlackBerry late Friday confirmed the worst concerning its financial situation, with the disclosure sending the company's stock into a 20 percent dive in afternoon trading on the Canadian stock exchange.
According to a financial statement released by the company, BlackBerry expects a GAAP net operating loss of approximately $950 million to $995 million for the second quarter of its fiscal 2014. The company also confirmed reports of massive job cuts from earlier this week. BlackBerry said it will need to cut 4500 jobs as part of a restructuring plan. The cuts are expected to be completed by the end of the first quarter of BlackBerry's fiscal 2015.
BlackBerry said it expects to report revenue for the second quarter of approximately $1.6 billion on sales of approximately 3.7 million smartphones. Unfortunately, the company also disclosed that over 50 percent of its total revenue was attributed to its service division.
Much to the dismay of investors, the company didn't sound like it has plans to change course. In a statement, Thorsten Heins, president and CEO of BlackBerry, said his company was implementing "difficult, but necessary operational changes," but he also maintained that the company could compete in the smarpthone market.
"Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user," Heins said. "This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."
BlackBerry's future smartphone portfolio will transition from 6 devices to 4 and focusing on "enterprise and prosumer-centric devices, including 2 high-end devices and 2 entry-level devices."
BlackBerry is just coming off the quiet launch of its 5-inch Z30 BlackBerry 10 smarpthone.
BlackBerry will discuss its full second quarter fiscal 2014 results on September 27, 2013.
As of 3:05 CT, shares of BlackBerry were down 17 percent at $8.73.