Seeking Alpha

BlackBerry issues FQ2 warning, cutting 4,500 jobs

  • BlackBerry (BBRY) expects to report FQ2 (Aug. quarter) revenue of $1.6B, far below a $3.06B consensus. The company also expects to report a GAAP op. loss of $950M-$995M, thanks largely to an inventory charge of $930M-$960M.
  • FQ2 smartphone shipments are pegged at 3.7M (mostly BB7 devices, due to BB10 channel inventories), down sharply from FQ1's 6.8M. FQ2 device sell-through is estimated to be 5.9M.
  • The company is cutting 4.5K jobs, or approximately 40% of its workforce.  It's looking to lower opex by 50% by the end of FY15 (ends Feb. '15). The WSJ recently reported major job cuts were pending.
  • BlackBerry's smartphone portfolio will go from 6 devices to 4 (two high-end, two entry-level). The company will focus on the enterprise and "prosumer" markets going forward.
  • Strategic alternatives are still being evaluated. Full FQ2 results arrive on Sep. 27.
  • Shares remain halted.
Comments (47)
  • wigit5
    , contributor
    Comments (3851) | Send Message
     
    Hmm expected info on the future sale of assets...
    20 Sep 2013, 03:24 PM Reply Like
  • webbersworld
    , contributor
    Comments (115) | Send Message
     
    ugh.
    20 Sep 2013, 03:24 PM Reply Like
  • LYogi
    , contributor
    Comments (1946) | Send Message
     
    ouch
    20 Sep 2013, 03:24 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1839) | Send Message
     
    Wow!!! All the rumors were true...
    20 Sep 2013, 03:26 PM Reply Like
  • David653
    , contributor
    Comments (1178) | Send Message
     
    i tried telling all of you, but you all called me negative and hateful. BLackberry designed the wrong device and should have allowed me to help. The Z30 is completely the wrong device also. However the Phablet idea of the Z30 is a good, but they designed it completely wrong.
    20 Sep 2013, 04:31 PM Reply Like
  • wigit5
    , contributor
    Comments (3851) | Send Message
     
    So when you offered to help Blackberry design a phone how did that conversation go? lol
    20 Sep 2013, 04:37 PM Reply Like
  • AxiosCap
    , contributor
    Comments (291) | Send Message
     
    lol the bulls on this name never learn.
    20 Sep 2013, 03:28 PM Reply Like
  • bgold1955
    , contributor
    Comments (1877) | Send Message
     
    Ax...although I am not a share holder of bbry I find your comment not beneficial by using "lol" acronym directed to current holders.

     

    What stocks are you long?
    20 Sep 2013, 03:34 PM Reply Like
  • AxiosCap
    , contributor
    Comments (291) | Send Message
     
    I've been debating the bulls on this stock for two years and they mock and laugh etc - call me a liar, what ever. So for me this is schadenfreude. Enjoy your losses all.
    20 Sep 2013, 03:37 PM Reply Like
  • bgold1955
    , contributor
    Comments (1877) | Send Message
     
    I guess I am anti-schadenfreude as I don't get pleasure from others misfortune.
    20 Sep 2013, 03:44 PM Reply Like
  • wigit5
    , contributor
    Comments (3851) | Send Message
     
    Hes not getting pleasure from their misfortunes rather his being correct despite the oppositions fervid calls.

     

    I think anyway
    20 Sep 2013, 03:48 PM Reply Like
  • jamesingram32
    , contributor
    Comments (517) | Send Message
     
    yeah i'm only in it for the money. took a hit on bbry that i bought 2 weeks ago... Way up on the year though, I've done next years target as well. Sin some lose some.

     

    I'm suspicious about why this was announced on a friday before results week though. buyout coming?
    20 Sep 2013, 03:59 PM Reply Like
  • David653
    , contributor
    Comments (1178) | Send Message
     
    they called me every name in the book, when i predicted this would happen. Blackberry employees and loyalists called me a troll, negative and hateful when all i was doing was trying to steer Blackberry in the right direction. Blackberry's devices and incomplete BB10 was wrong right from the start but they just would not believe me. I would never defame anyone's products unless i was able to provide a solution.
    20 Sep 2013, 04:36 PM Reply Like
  • David653
    , contributor
    Comments (1178) | Send Message
     
    me either, i cried for all those people losing there jobs in Waterloo. And rude BLackberry still wont let me help. ''):
    20 Sep 2013, 04:37 PM Reply Like
  • jamesingram32
    , contributor
    Comments (517) | Send Message
     
    what's your thoughts now David?
    20 Sep 2013, 05:17 PM Reply Like
  • Tricky
    , contributor
    Comments (1569) | Send Message
     
    The vicious, delusional rantings against anyone who dared say anything negative about RIMM have been quite something to behold.

     

    Only yesterday, shrieking about why the WSJ was "only" talking about the layoffs and not the new product releases. Well, what the heck do you THINK the headline is going to be when a company announces that is going to lay off an astounding 40% of its workforce??!!

     

    But no, it's a conspiracy o_0
    20 Sep 2013, 06:19 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    the greatest mistake of the "longs" for the past year (and that is saying A LOT) has been their categorization of any comment into two buckets, "negative" or "postive". Negative being anything that hinted at failure, regardless of the logic. Positive being anything that supported the hopes of success, regardless of the logic.

     

    I guarantee you most on her immediately took up arms the second they saw my handle, AND THEN decided to read what I wrote.

     

    HUGE mistake. A comment can't be negative or positive. It simply is what it is. Ultimately an opinion is right or wrong. Negative is purely in the eye of the beholder. You can call something negative all you want, but that does not preclude it from being correct. AND THAT is what doomed you people from the start.
    23 Sep 2013, 11:05 AM Reply Like
  • AxiosCap
    , contributor
    Comments (291) | Send Message
     
    Thank you wigit - that is correct. I don't like to see people lose. That's why Im in this business. It was obvious for anyone that wanted to see it.
    24 Sep 2013, 09:38 AM Reply Like
  • TheLastSpartan
    , contributor
    Comments (107) | Send Message
     
    Ah, Couldn't they wait till after hours ...
    20 Sep 2013, 03:31 PM Reply Like
  • TheLastSpartan
    , contributor
    Comments (107) | Send Message
     
    Half an hour before end of the session. If that is not a manipulation so somebody can make a killing with SEPT 21 puts I do not know what else is.

     

    The Blackberry management lost it's last drop of credibility for me.
    20 Sep 2013, 03:49 PM Reply Like
  • Quoth the Raven
    , contributor
    Comments (1820) | Send Message
     
    I don't wanna say I called it, but...

     

    http://seekingalpha.co...
    20 Sep 2013, 03:32 PM Reply Like
  • Randal James
    , contributor
    Comments (2156) | Send Message
     
    For my next prediction: volume is about to spike.

     

    Share price, not so much.
    20 Sep 2013, 03:35 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    doesn't look good. Looks like they are going to shut down!
    20 Sep 2013, 03:36 PM Reply Like
  • heronl
    , contributor
    Comments (17) | Send Message
     
    I own a Q10, superb, slick device. I can't believe this, why are these phones not selling?
    20 Sep 2013, 03:37 PM Reply Like
  • cn_habs
    , contributor
    Comments (203) | Send Message
     
    The average consumer associates BBRY as untrendy, laggy devices with tiny screen which is no longer true but it doesn't matter at this point anymore.

     

    Its marketing sucked till the end.
    20 Sep 2013, 03:48 PM Reply Like
  • Nomore BB
    , contributor
    Comments (16) | Send Message
     
    How many teens love the bb phone? How many companies switched to other company models and/or started to the byod policy? I like the company but i didnt see any new bb unit around me. As i am a bb user, i want to switch to other one too. Bb curve and touch are not good. Q10 may be a good on but i wont upgarde my bb to an other bb unit.
    20 Sep 2013, 03:48 PM Reply Like
  • pat45
    , contributor
    Comments (281) | Send Message
     
    I like phone too...but sales reps say dont buy it..company going out of business.
    20 Sep 2013, 06:52 PM Reply Like
  • ImportedFromtheD
    , contributor
    Comments (13) | Send Message
     
    they aren't selling because they are still laggy phones that have an app ecosystem that is incredibly pathetic to say the least. The only way to get some of the more popular apps (Netflix, Instagram, Spotify) is by running Android on blackberry devices. There's no way anyone would want to use Android on a blackberry and have to deal with a slow laggy version of an application that isn't even native to the device's app ecosystem. Even Microsoft got the memo that consumers want to be able to use their phones for entertainment. My question to you is have you tried any phones that run Android or iOS or even Windows Phone 8? I don't deny that the new BBRY devices run well but applications rule the ecosystem for smartphones. The only value (to consumers) that this company has moving forward is in BBM.
    21 Sep 2013, 04:30 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    No they did the right thing, now you will have enough time to decide what you want to do!
    20 Sep 2013, 03:37 PM Reply Like
  • jamesingram32
    , contributor
    Comments (517) | Send Message
     
    why announce this afternoon, when their results are dues out on the 27th?
    20 Sep 2013, 03:49 PM Reply Like
  • Shane Zhao
    , contributor
    Comments (45) | Send Message
     
    Because they have something worse prepared for 27th
    20 Sep 2013, 05:12 PM Reply Like
  • jamesingram32
    , contributor
    Comments (517) | Send Message
     
    That's a possibility, but why not just announce everything on the 27th?
    20 Sep 2013, 05:18 PM Reply Like
  • Randal James
    , contributor
    Comments (2156) | Send Message
     
    james,

     

    That is a reasonable question and I suppose part of the answer is tradition. RIM did the same thing April 29, 2011. The stock was in the 50's at the time and showing much better earnings than today, but sales were slow and the earlier earnings estimates too high. It is the ethical thing to do.

     

    In this year's version, we have floating news of layoffs and production cutbacks and other firms coming in to see if there is something to sell... You are almost contributing to a false sense of 'nothing is wrong' if you do not warn.

     

    Perhaps the size and scope of the layoffs were just established or the estimates for sales not quite firm. BlackBerry does operate - with a surprising amount of volume - in countries where that information is slow to develop.

     

    The main thing is to deal with it and try to guess what's next. Is there a suitor or a parts buyer? How much cash is left? Last Q, the stock sold off but then actually hit fresh lows in subsequent days. Repeat or fresh story?

     

    Everyone long wants as much out of this as possible. That depends nearly entirely on whether this is an auction of a retooling. Maybe clarity will pop out of the next Q report. I'll bet the analysts have some pointed question.
    20 Sep 2013, 05:39 PM Reply Like
  • jamesingram32
    , contributor
    Comments (517) | Send Message
     
    thanks Randall,

     

    great to have some thought and analysis. There has been a whole outbreak of forum mudslingiong on this tonight! Me, I'm just around to make money ( which I've done :), ) and also to learn. As a NOK long I've never headed over to the bbry board to poke fun.
    Great point. We are where we are, so the question really is, as you say, what is next..

     

    unfortunately action is out of our hands until open on monday. I have a little position long. Too much to hope for a buyer over the weekend. I wonder what Fairfax have done with their 10%, and is there any way of seeing if any buy accumulation has been going on.

     

    Let's see on Monday.
    Bed now. 11+ exam for my eldest in the morning, which is much bigger than this for our family. fingers, and toes all crossed.

     

    Good luck all on Monday.
    20 Sep 2013, 05:53 PM Reply Like
  • wigit5
    , contributor
    Comments (3851) | Send Message
     
    maybe the mass layoff notifications would have gotten out anyway?
    20 Sep 2013, 03:51 PM Reply Like
  • Energysystems
    , contributor
    Comments (875) | Send Message
     
    Yeah, you can't exactly be sly with a 40% workforce reduction. Word would have gotten out, might as well take it on the chin, since you're gonna take it on the chin anyway.
    20 Sep 2013, 03:55 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    Word was out early this week...longs claimed the WSJ was conspiring against BBRY and it was all lies. Surprise! LOL.
    20 Sep 2013, 04:58 PM Reply Like
  • alext1379
    , contributor
    Comments (697) | Send Message
     
    So BB is dropping the pursuit of the fartapp customer. Cutting their staff to represent the abandoning of the app market makes complete sense.

     

    Hard to swallow now but if they're expanding BES business and targeting the rich customers, then they'll be profitable.

     

    My Puts just quadrupled in value. I would recommend picking up calls after the Q2 numbers are official next week.
    20 Sep 2013, 03:54 PM Reply Like
  • Randal James
    , contributor
    Comments (2156) | Send Message
     
    A nearly full moon tonight.

     

    How to tell if your neighbors were also long BBRY

     

    http://bit.ly/14r583p

     

    Wise tip of the day: first step is admitting there is a problem. The warning gets everyone's head on straight for what will be a difficult but potentially smart transition to play on BlackBerry's strengths.
    20 Sep 2013, 03:56 PM Reply Like
  • tiger8896
    , contributor
    Comments (564) | Send Message
     
    The revenue and device numbers are shocking. If anybody didn't think BB10 was a bust, they ought to believe it now.
    20 Sep 2013, 04:15 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    You'd really like to think so, wouldn't you? I have a feeling we're not done with the cheerleaders yet. They are nothing if not persistent.
    20 Sep 2013, 05:00 PM Reply Like
  • Dantes_Will
    , contributor
    Comments (298) | Send Message
     
    No chance of BBRY being sold off whole now.

     

    BBRY will be picked apart on the cheap for Patents and BBM.

     

    BES will have to be sold for a fraction of its value as it just lost another 20% of its install base.

     

    Sad that they could have taken Microsoft's offer a few years ago and saved the company.

     

    RIP BBRY
    20 Sep 2013, 04:19 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    It's obvious now that one of the cuts to work force is going to be TH for sure. Missing by that much is disastrous. There is no way TH should be allowed to continue! BTW What are the low end devices? According to TH they don't have any? It seems that the reporting the company was for sale turned out to be a major blunder. It's obvious a lot of customers got scared when they heard that news and didn't buy the products. It's too bad because they have great products but the management continues to shoot them selves in the foot.
    20 Sep 2013, 05:51 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    Guess their only option now is to go private (if they do get the funds). If that happens they need to get a new CEO ASAP. TH had the opportunity to prove himself but blew it.
    20 Sep 2013, 05:52 PM Reply Like
  • eieio
    , contributor
    Comments (70) | Send Message
     
    It is really great that the company will focus on the enterprise and "prosumer" markets going forward. The people with the money!
    BB so far is the only Vendor that is approved to work on the DOD network. What a great opportunity! The BB company will become the equivalent to them being a Porsche or Maserati seller. They can dedicate their resources to servicing this wealthy segment and make the cost of entry for the other "consumer oriented" vendor prohibitively high. After all of the dust has settled and they have downsized and regrouped they should still have $$$s in the bank, no debt and a quality high end segment that they can cater to quite profitably!
    20 Sep 2013, 05:54 PM Reply Like
  • LYogi
    , contributor
    Comments (1946) | Send Message
     
    If they stay public then shares will exponentially increase in value in the long term.

     

    I'm left holding the bag but only 1/3 into the time frame I had earmarked for the company to turn itself around.
    20 Sep 2013, 05:58 PM Reply Like
  • freed0m
    , contributor
    Comments (491) | Send Message
     
    How wrong is the sale projection to cause such a large write down? Can't believe that the CEO was COO last time. Please fire all the C*Os.
    20 Sep 2013, 09:21 PM Reply Like
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