US telecommunications giant Blackberry misses targets

BlackBerry sales fall short of estimates

US telecommunications giant BlackBerry has posted sales that have fallen short of analysts’ estimates as shrinking smartphone sales and an inventory writedown overshadowed a boost in software revenue.

First-quarter earnings per share, excluding some items, broke even, compared with analysts’ average estimate of a loss of 7c.

Revenue in the quarter was $424m (€373m), including software and services revenue of $166m that was 21% higher than the same period last year. Analysts had estimated total revenue of $471m.

A net loss in the quarter of $670m reflected a $501m impairment charge, a $57m goodwill impairment charge, and a $41m writedown of inventory and other charges.

BlackBerry changed its reporting structure to include revenue from both smartphone sales and licensing deals.

The new unit — “mobility solutions” — accounted for 36% of revenue. The company sold 500,000 devices in the quarter, compared with 600,000 in the previous quarter.

Chief executive John Chen is pushing to increase software sales while finding a way to wring profitability from the company’s shrinking smartphone division.

Mr Chen has said BlackBerry’s first Android phone, the keyboard-equipped Priv, didn’t sell as well as he had hoped because it was too expensive.

The company is working on two more Android phones, including a cheaper option, but Mr Chen has said he may cut the unit altogether in September if he can’t make it profitable.

If he can’t restore profitability to the handset unit, it’s “got to go,” said John Butler, an analyst with Bloomberg Intelligence.


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