Second quarter preliminary fiscal 2014 results looking very bad for the company formerly known as RIM
BlackBerry has reported hefty losses in its preliminary second quarter results for the fiscal year 2014, plus 4,500 job losses and the streamlining of its device portfolio.
The struggling company announced that it is targeting an approximate 50% reduction in operating expenditures by the end of the first quarter of fiscal 2015. As part of this, BlackBerry is implementing a workforce reduction of approximately 4,500 positions or 40% of the company's global workforce. This will result in a total workforce of approximately 7,000 full time global employees.
Additionally, due to increased market competition and to aid it in enhancing its financial results, BlackBerry also announced plans to transition its future smartphone portfolio from six devices to four. The portfolio will focus on enterprise and prosumer-centric targeted devices, including two high end devices and two entry level devices in all-touch and QWERTY models.
With the launch of the BlackBerry Z30, the next generation high tier smartphone built on the BlackBerry 10 platform, last week, the company will re-tier the BlackBerry Z10 smartphone to make it available to a broader, entry level audience.
Thorsten Heins, president and CEO at BlackBerry, said: 'We are implementing the difficult, but necessary operational changes to address our position in a maturing and more competitive industry, and to drive the company toward profitability. 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. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.'
The Special Committee of the BlackBerry's Board of Directors is continuing to evaluate all strategic alternatives for the company.
Financially, BlackBerry said it expects a GAAP net operating loss of approximately $950 million to $995 million; the loss includes a primarily non-cash, pre-tax inventory charge of approximately $930 million to $960 million resulting from the increasingly competitive business environment impacting BlackBerry smartphone volumes, particularly BlackBerry Z10 devices. The current quarter will also include a pre-tax restructuring charge in the approximate amount of $72 million reflecting ongoing cost efficiency initiatives.
BlackBerry expects to report revenue for the second quarter of approximately $1.6 billion, while recognising sales of approximately 3.7 million smartphones in the second quarter. During the second 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 channel.
At the end of the second quarter, total cash, cash equivalents and investments is estimated to be approximately $2.6 billion. The Company has no debt.
Smart Chimps thinks: BlackBerry is practically a down and out and desperately needs rescuing from its current situation. After a <a href='../FullArticle.aspx?newsid=1532'>disastrous first quarter results</a>, it seems the second quarter is definitely going to be no better. Adding to this, a hefty 4,500 people are set to have no job to go to. This is the point of no return for former glamour girl BlackBerry; she needs a sugar daddy, and soon, or she'll be destitute and living in a Cat House in the middle of the Nevada Desert by winter.
