While it won’t be holding an investor call to discuss quarterly results, BlackBerry did share the numbers on Friday. And they aren’t good: The company reported a net loss of $965 million for the quarter, the bulk of which was a pretax noncash charge for inventory of the BlackBerry Z10 handset.
It’s no longer arguable: the new BlackBerry 10 handsets won’t give the company the comeback it expected to have. Out of the 5.9 million handsets sold in the quarter, the company says most were running the older BlackBerry software:
“Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers. During the quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in the channel.”
Given that the company has recently said it’s getting out of the consumer market and some carriers are already moving BlackBerry phones off retail shelves and into warehouses, there is little evidence of BlackBerry 10 is helping reverse the company’s fortunes. And even with 5.9 million handset sales, only 3.7 million of them contributed to the company’s revenue.
That didn’t help the revenue number which totaled $1.6 billion, down 45 percent from the same quarter in 2012. Not long ago, BlackBerry handset sales accounted for 75 to 80 percent of revenues. This quarter, hardware contributed 49 percent towards revenues with services adding 46 percent to the total.
If there’s a bright side, it’s on the higher-profit services side. The company says it now has 25,000 BES 10 commercial and test servers in place; up from 19,000 just this past July. Hopefully, the potential new owner of BlackBerry can keep growing that segment of the business.