Blackberry said it will cut approximately 4,500 jobs and streamline its smartphone portfolio from six to four devices. It will focus on enterprise and prosumer-centric devices, with two high-end and two entry-level handset in all-touch and QWERTY models. With the launch of the BlackBerry Z30 this week, the company will re-tier the BlackBerry Z10 smartphone to make it available to a broader, entry-level audience. At the same time, the special committee of the board of directors continues to evaluate all strategic alternatives for the company. Blackberry aims to cut operating expenditure by some 50 percent by the end of the first quarter of its 2015 financial year. In the second quarter of its 2014 financial year, it predicts a GAAP net operating loss of approximately USD 950-USD 995 million, including a pre-tax restructuring charge of USD 72 million.
The second quarter 2014 GAAP net operating loss includes a primarily non-cash, pre-inventory charge of approximately USD 930-USD 960 million resulting from the increasingly competitive business environment hitting smartphone volumes. Revenue for the second quarter is forecast at approximately USD 1.6 billion, of which 50 percent is expected to be services revenue. The company expects to recognise hardware revenue on approximately 3.7 million BlackBerry smartphones and has reported increased penetration of BlackBerry Enterprise Service 10 (BES 10) with more than 25,000 commercial and test servers installed to date, up from 19,000 in July
Most of the units recognised are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognised until they are sold to end-consumers. In the second quarter, some 5.9 million BlackBerry smartphones were sold through to end-customers, including shipments made prior to the second quarter and which reduced the company’s inventory in channel.
The second quarter adjusted gross margin is forecast to be approximately 35-37 percent. The adjusted net loss, before giving effect to inventory and restructuring provisions, is projected in the range of approximately USD 250 million-USD 265 million, or USD 0.47-0.51 per diluted share. At quarter-end, total cash, cash equivalents and investments is estimated to be approximately USD 2.6 billion. The company has no debt.
