Please ensure Javascript is enabled for purposes of website accessibility

BlackBerry Fumbles Third-Quarter Results but Announces New Strategy; Shares Rise

By Anders Bylund - Dec 20, 2013 at 9:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

BlackBerry may have missed analyst targets in the third quarter, but shares are trading higher on a new software-centric strategy.

Smartphone designer BlackBerry (BB -1.03%) reported third-quarter results this morning.

Revenue was down 24% year over year to $1.2 billion, and non-GAAP earnings amounted to a $0.67 loss per share. Non-GAAP numbers are backing out a $2.7 billion non-cash impairment charge against BlackBerry's long-lived assets, including manufacturing equipment and surplus office space. They also ignore a $1.6 billion writedown of firm supply commitments and unsold inventories, mainly consisting of BlackBerry 10 smartphones.

BlackBerry said it sold just 1.9 million smartphones in the quarter compared to 3.7 million in the previous quarter and said most of them were old BlackBerry 7 devices.

Analysts were looking for a smaller adjusted loss and $1.6 billion in sales. BlackBerry missed both targets, but the stock still opened 3.7% higher today.

Hoping to stabilize the company's financial performance, CEO John Chen is taking BlackBerry in a new direction that focuses more on software and services than on handset sales. "While our Enterprise Services, Messaging and QNX Embedded businesses are already well-positioned to compete in their markets, the most immediate challenge for the Company is how to transition the Devices operations to a more profitable business model," Chen said.

To that effect, BlackBerry also announced a partnership with device manufacturing specialist Foxconn. The five-year agreement sees BlackBerry designing low-cost smartphones for Indonesia and other emerging markets, to be manufactured at FoxConn's facilities in Indonesia and Mexico.

-- Material from The Associated Press was used in this report.

link

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BlackBerry Stock Quote
BlackBerry
BB
$5.74 (-1.03%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.