BlackBerry turns negative; Chen promises QWERTY phone push

|About: BlackBerry Ltd. (BBRY)|By:, SA News Editor

Initially up sharply following after posting a big FQ4 EPS beat to go with an (also large) revenue miss, BlackBerry (BBRY -2.2%) has reversed course.

Analysts are worried the cost cuts that drove the EPS beat - R&D/SG&A spend fell 34% Y/Y to $601M - will only do so much. "John Chen did what John Chen is known for. He came in and he's cut the cost base," says BGC's Colin Gillis.

On the CC, Chen said BlackBerry plans to re-launch BB7-based Bold phones that have seen strong demand. He also stated three new high-end QWERTY BlackBerrys would likely arrive in the next 18 months. "I hope nobody thinks we don’t take seriously the handset business."

Sales of the high-end/QWERTY Q10 fell flat last year, as the iPhone and Samsung's Galaxy line continued dominating the high-end. BlackBerry recently unveiled the Q20, a new QWERTY flagship.

Chen also reiterated BlackBerry aims to be profitable in FY16 (ends Feb. '16), and said the company will "take a very serious look" at bringing BBM to PCs. BBM's active user base has surged past 85M since Android/iOS apps launched last fall.

3.4M BlackBerrys were sold to end-users in FQ4, down from 4.3M in FQ3 and 5.9M in FQ2. Due to inventory-clearing, BlackBerry only recognized revenue on 1.3M shipments.

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This was corrected on 03/28/2014 at 02:26 PM. The post previously referred to the Q20 as a low-cost phone. While BlackBerry has launched a low-cost touch-only phone for emerging markets (the Z3), the Q20 is a high-end phone.