BlackBerry (BBRY -26%) states on its FQ1 call BB10 phones made up 40% of the quarter's...

BlackBerry (BBRY -26%) states on its FQ1 call BB10 phones made up 40% of the quarter's smartphone sales. That implies ~2.7M shipments, below a consensus of 3M+ (had risen in recent weeks). BlackBerry subs totaled 72M, -4M Q/Q. Total smartphone shipments +13% Q/Q and -13% Y/Y. 71% of revenue came from hardware, 26% from services, and 3% from software/other. That's a major shift from FQ4's 61%/36%/3%, and suggests service fee cuts and sub losses took a toll. They also affected gross margin, which fell 620 bps Q/Q to 33.9% after rising 970 bps in FQ4; it was still up 590 bps Y/Y. Opex -15% Y/Y to $1.21B thanks to last year's job cuts, but +11% Q/Q thanks to higher marketing spend. (PR) (previous: I, II)

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Comments (14)
  • pvshah6542
    , contributor
    Comments (84) | Send Message
    All the top management should take a 30% cut in their salary and commissions. Especially when the stock tanked by 30%. Had they kept their prices of their so called "premium devices" lacking apps probably we would have seen a number of 5 million BB10. AGAIN their arrogance killed them. What a shame and injustice to the brilliant work the team did to get BB10 rolled out. Not that Z10 and Q10 are bad phones from any stretch of imagination but the premium rates killed BB. Looks like the stock shall again be a good buy for future hopes at levels of $8.50-$9
    28 Jun 2013, 09:51 AM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
    That would be a good idea, pv, but don't hold your breath; exec salaries only ever go upwards, on good news or bad. There's nothing wrong with the phones, but the advertising and supply left much to be desired! Your price for end of year looks about right, but who knows what the next report will bring? This could always be the lull before the storm...
    28 Jun 2013, 10:04 AM Reply Like
  • cn_habs
    , contributor
    Comments (544) | Send Message
    So subscriber base is down and so are the gross margins and service fees.


    I was a strong bull till earlier this morning and decided to sell at a loss. The only thing which can save it at this point is some major partnership with Lenovo or investment by Ichan, etc.


    Having a great product doesn't automatically mean people will buy it. Lesson learned.
    28 Jun 2013, 10:01 AM Reply Like
  • Shred13
    , contributor
    Comments (46) | Send Message
    The government of both US and Canda will not allow that to happen, especially due to the latest cyber spying threat by the Chinese and the fact that a Chinese company owning and controlling the president's BlackBerry somewhat does not bode well to many. I agree with Gwyn on how the advertising was certainly lacking, especially in the developing countries where they are suppose to be strongest
    28 Jun 2013, 10:24 AM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
    I expect you are right, Sh, but not every chinese company is tied to the PLA; Lenovo is run on Western likes, and is very open.
    2 Jul 2013, 09:22 AM Reply Like
  • alext1379
    , contributor
    Comments (811) | Send Message
    It's been 45 min of trading and 5 million shares have changed hands on the TSX, there's a huge amount of short covering going on considering the low of $10.75 has been hit twice followed by a recovery to $11.20, in 45 minutes.


    Apple, Netflix, IBM are all getting hit today, all are profitable (although NETFLIX to me is a prime short target).


    Samsung is up 1.5% on the KOSPI, must be due to believing BlackBerry is no longer a threat (can't be because S4 sales are a flop).
    28 Jun 2013, 10:16 AM Reply Like
  • Loon-a-tick
    , contributor
    Comments (1928) | Send Message
    It could have been hammered a lot worse. The day ain't over. I would expect a lot more trades and more pain...but It isn't horrible horrible... It isn't a rout ...yet... I don't think it will be.
    28 Jun 2013, 10:39 AM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
    No reason it should, Loo; such a lot of fuss over just one report!
    2 Jul 2013, 09:23 AM Reply Like
  • Tony (long)
    , contributor
    Comments (68) | Send Message
    It seems all high end smartphones sales down then... Apple and Samsung can tolerate that but not BlackBerry! Competitive landscape/ market saturation. BlackBerry better make Q5 more competitive


    Expect Apple will miss too but they will still turn an operating profit
    28 Jun 2013, 10:22 AM Reply Like
  • farmwersteve
    , contributor
    Comments (348) | Send Message
    well, I guess what we need to know is what the tangible share value is currently. that should be the new floor price hopefully and as things progress, we might see some more gains.


    it would be nice to see shorts covering, that way this stock can hopefully rise organically.


    I am broken even, but knew it was a gamble when I bought, so, as the saying goes... a chip and a chair
    28 Jun 2013, 10:24 AM Reply Like
  • alext1379
    , contributor
    Comments (811) | Send Message
    Half the shorts were taken out at around $12, they're scrambling to cover today while the going is still good.


    It may hurt today but once the shorts save themselves and move on, BB shares will do what they should have done 6 months ago.


    Here's example of how stocks don't always make sense, Molycorp consistently loses money (more per share than BB) but has risen $1 on the NYSE this week. Some gold miners are up today as well eventhough Gold is down.
    28 Jun 2013, 10:29 AM Reply Like
  • usajordi
    , contributor
    Comments (200) | Send Message
    The Venezuela currency problem should had never happen!
    You never sell there in the local currency.
    Does BBRY have a subsidiary there?
    If they do should had never had shipped one phone without an L/C or prepaid up front in $.
    If there is a responsable for that problem they should let him go!
    The local currency had been depreciating extremely fast for many years already like 10.000 times to one since the last 14 years.
    First they took three zeros out, and created the Bolivar Fuerte, and in the last three - four years in the free markets lost another 90% of the value until today, .
    But there is a slim possibility that that money can be recovered some day if Cavidi approves the payment in USA $.
    28 Jun 2013, 11:29 AM Reply Like
  • rbrar03
    , contributor
    Comments (29) | Send Message
    I don't see this as really a negative earnings report. I see it as a transition from service revenue earning/low cost bb7 devices to bb10 high cost/low or no service revenue. I think many people and reputable analyst got carried away expecting too much in too little time. There are missteps such as staggered device releases, delays for US releases due to "Carrier testing" and delays in offering updated software to everyone, namely 10.1. BB10's os is complex to operate in retrospect appeals to fewer people. In addition, during launch, very few must have apps were posted on Blackberry World's page, making the transition from BB7 to BB10 to many people. Basic banking apps that many people use daily are slowly coming to BB10 and some may never make it. This combined with a very competitive smartphone market has hurt BB sales. Finally, the release of the S4 has really taking the very little spotlight that BB10 had with the carriers. I used to see many ads with carriers about the Q10 and Z10 but now it appears that they have shifted all their attention to the S4, a plastic android phone(we won't get into my hate for android OS here). Now BB must focus their attention to continue to launch worldwide, market and push for carriers/sales staff to learn the device. It seem to be a spectacle that you go into a store selling BB devices and the salesperson starts showing you the S4, HTC One or an iPhone 5. Finally, there is very little discussion of the importance of QNX in cars from BB and BES10. We may not see any fruit from these two seeds until 2014. It seems like investors selling today after the earnings report were only in it for the short run anyways. The volume was tiny compared to the drop following the first earns report. I wonder how Prem Watsa feels now about his $40 price target?
    28 Jun 2013, 12:25 PM Reply Like
  • bakermre
    , contributor
    Comments (378) | Send Message
    There is no substitute for poor presentation, except bad management.
    If poor presentation of difficult results is the true issue, then show good management in the year ahead. Let us suffering shareholders see solidarity, for once. If Mr. Heins and his top team are really serious, they should all take a one year moratorium on salary and accept only stock options as compensation, with a base at about $10 per share. If they refuse, then we'll all know what we must do, pronto!
    2 Jul 2013, 03:02 PM Reply Like
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