BlackBerry May Incur Losses Until 2016

BlackBerry May Incur Losses Until 2016

Michael Walkley of Canaccord Genuity revealed that BlackBerry may continue to incur losses until the 2016 fiscal year. The analyst is expecting losses for the mobile device manufacturer to continue in the next two years.

Although he was impressed with the cost-cutting measures implemented by the company, Walkley indicated that the long-term plans of the management of the company may not allow it to reap its benefits immediately. This was revealed in an investor note Walkley released recently. Due to this, the company will experience operating losses throughout the fiscal year 2015.

The financial standing of the company may begin to improve once the BlackBerry Enterprise Service is introduced in November. However, it will not break even until after the end of fiscal year 2016, or on March 2016.

The company incurred losses totaling $423 million in the final quarter of fiscal year 2014, which ended on March 1. In comparison, the quarter of the previous year saw the company gaining a profit of around $98 million. Revenue went down to $976 million or by 64 percent.

Even as the analyst admired the cost-cutting moves of the company, Walkley said it may be necessary for the company to further reduce expenses due to the declining demand for its products and its smaller number of subscribers. The analyst added that the agreement with Foxconn in manufacturing BlackBerry-powered devices will not be enough to increase the share of the company in the market.

Walkley indicated that it is difficult to assign a value to the segment in connection to the hardware business of the company even with the partnership with Foxconn. BlackBerry will also have some difficulty in maintaining a profitable business as it goes up against the current leaders in the industry, Samsung and Apple.

Posted by James Fried on Wednesday April 02 2014, 2:52 AM EST. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0