BlackBerry sales tumble 64% amid weak BB10 adoption

Out of 3.4 million BlackBerrys sold in the fiscal fourth quarter, only 1.1 million ran on the newer BlackBerry 10 OS. Still, the company posted a narrower loss than expected.

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BlackBerry CEO John Chen speaking at an event at Mobile World Congress in late February. Brian Bennett/CNET

BlackBerry continues to struggle in getting customers to adopt its newer BlackBerry 10 platform.

The embattled smartphone maker posted a fiscal fourth-quarter loss of $423 million, or 80 cents a share, swinging from a profit of 98 million, or 19 cents a share, from a year ago. On an adjusted basis, or excluding one-time items, it posted a loss of $42 million, or 8 cents a share.

Revenue fell 64 percent to $976 million.

Analysts, on average, forecast a loss of 55 cents a share and revenue of $1.1 billion, according to Thomson Reuters.

The narrower loss has shares of BlackBerry up 6.2 percent to $9.61 in pre-marketing trading.

BlackBerry is in the midst of a transformation it hopes will pull it back from the brink, which includes a new management team and lots of cost cuts. The company is also redoubling its focus on selling phones and services to corporate and government clients, while also looking to protect its base of low-end customers in emerging markets.

Chen previously said he expects the company to be cash flow positive within the next four quarters and profitable by fiscal 2016. On Friday, he reiterated that goal, noting that the company is a quarter ahead in cutting its operational costs.

"I'm pleased the company is back in execution mode," Chen said during a conference call on Friday. He added the company is about a quarter ahead of its plan in lower operating expenses.

All the while, BlackBerry continues to see sales of its smartphones tumble as its market share has deteriorated.

The company sold 3.4 million BlackBerry phones to customers, but only 1.1 million ran on its newer BlackBerry 10 operating system. Its older BlackBerry 7-based devics remain popular in emerging markets. It added it recognized hardware revenue on 1.3 million BlackBerry phones, down from 1.9 million in the fiscal third quarter.

The company is focusing on some of pockets of life remaining in its business, including its BBM messaging service, its QNX embedded software business, and its enterprise server services. Chen reaffirmed BBM's 85 million monthly active users and said a priority would be to grow the user base. BlackBerry unveiled plans for an update to start generating revenue from BBM, initially through stickers and sponsored posts.

In late February, BlackBerry showed a bit of life with a tease of two new products made by Foxconn: the low-end Z3 destined to hit Indonesia first, and the more traditional enterprise-friendly Q20, which CEO John Chen half-seriously coined the "BlackBerry Classic."

Still, it's unclear whether there are enough takers for either phone. Both Android and Windows Phone have made a play with more affordable products, while its high-end market share has eroded to all but the most secure companies and government agencies.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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