BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares soared during the regular trading day on Friday, climbing more than 15% at the NASDAQ after the company posted losses that were far worse than even the low bar analysts had set. Those gains came after a major decline due to the terrible results. So why the sudden change of heart? It may have had something to do with the company’s earnings call. New interim CEO John Chen was quite encouraging and said they would be not only setting up four new strategic divisions, but also increasing their focus on enterprise, which is where BlackBerry’s strength still lies.
Adjusted losses were 67 cents per share, and sales were $1.2 billion. Those numbers are compared to Wall Street estimates of 43 cents per share in losses and $1.5 billion in revenue. BlackBerry also took a $4.6 billion charge to write down inventory and pay for some costs associated with restructuring and cutting some positions.
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BlackBerry announces strategic restructuring
Along with its exceptionally weak results, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) said it was creating four new divisions Enterprise Services, Messaging, QNX and Devices. The struggling Canadian reported that it was making progress in BlackBerry Enterprise Service 10 penetration. It said that there are now more than 30,000 commercial and test servers installed, compared to 25,000 in September. BlackBerry sees its global enterprise customer base passing 80,000.
The strength of BBM
Many have been watching the rollout of BBM onto iOS and Android, and BlackBerry reported that there that they may be up to 80 million active users for the messaging app. Chen added that 60% of those active users are on BBM every day, which he said is excellent, especially when compared with Instagram, which has about 50% of its active monthly users on it daily. He also noted that many users are on BBM for greater amounts of time—nearly 90 minutes a day on average.
In addition, more than 12 makers of Android devices agreed to preload BBM on their devices, including LG. In addition, there have been more than 250,000 BBM Channels created by the messaging app’s global user base since the feature launched. Even high profile brands like Coke Indonesia and USA Today have set up channels.
Upcoming plans for QNX
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is also furthering its push into the automotive and cloud industries. Chen called their QNX division “one of the crown jewels.” The division has plans to show off new tech for both industries at the Consumer Electronics Show next month.
BlackBerry’s partnership with Foxconn
One of the biggest problems BlackBerry has had is the tremendous failure of its new devices, but the company wants to change that too. It announced a new partnership with Foxconn. They will be focused on developing consumer smartphones for Indonesia and other rapidly growing emerging markets in 2014.
Chen said Foxconn would probably be taking over device design because the company has a lot of experience in controlling costs in building handsets. He also noted Foxconn’s ability to design devices with faster turnaround times and to position BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) well in emerging markets. The interim CEO said their first device with Foxconn would actually launch in either March or April in the Indonesian markets. In spite of the problems with getting users to buy BlackBerry 10 devices, they will still base the new device on that operating system.