Mixed Q4 results
For the fourth quarter of 2013, the analysts estimated the company would a post loss of $0.56 per share on revenue of $1.13 billion, and the company beat expectations by posting an EPS of -$0.08 on $976 million in revenue.
Revenue came in low, indicating 64% year over year decline from the fourth quarter of 2013 and a sequential decline of 18% from the third quarter of 2013. The cash balance of the company also slipped from $3.2 billion at the end of third quarter 2013 to $2.7 billion in the fourth quarter.
However, the company has been successful in cutting its expenses, which was the main reason for posting substantially lower loss than the expectations.
Also, the majority of devices it sold were based on OS7 rather than the new BlackBerry 10 OS. However, the company is still hoping to revive by narrowing down its operations and achieve break even cash flow by next year.
Drop in short interest
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares have witnessed a significant short interest decline, but the short interest is still relatively high. As per the report from NASDAQ, there were more than 10.13 million shares of the stock sold short at the end of April. On May 15, the number declined below 94 million shares, which totals to a 7.4% decline, but 19% of BlackBerry shares are still sold short.
BlackBerry survival in question
Just a week back, a report from IDC claimed that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) global shipments will decline around 50% this year to around 9.7 million smartphones. Worldwide market share will also decline to 0.8% in 2014 and may even drop to 0.3% by 2018. the operating system of the company accounted for 1.9% of the market in 2013.
IDC said in a statement that there is doubt over the survival of BlackBerry in the future. “And with expectations that share will fall below 1 percent in 2014, the only way the company will be viable is likely through a niche approach based on its security assets.”
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s OS is lagging well behind rivals like Google’s Android operating system, which is dominating 80.2% of the global market this year. Android’s market share will slip to 77.6% in 2018, according to IDC estimates.