BlackBerry Ltd Getting Worse With No End In Sight

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On Friday, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) posted bleak third quarter results for the period ending in late November. BlackBerry’s financials continue to deteriorate with weak revenue, continued losses and an unimpressive balance sheet, and there looks to be no respite.

3Q no exception

Losses incurred by the Canadian smartphone maker totaled to $4.4 billion, or $8.37 per share. For the first time, the company had to write down inventory by taking a non-cash charge of $2.7 billion against a significant asset. To make matters worse, the company took a $1.6 billion primarily non-cash charge against inventory and supply commitments. The Canadian company also took a $266 million charge related to its ongoing restructuring program.

Analysts were looking for revenue to come in at $1.59 billion, which would have been a decline of 41.5% from the $2.73 billion figure in the previous year’s corresponding period. Analysts were expecting an adjusted loss of $0.45 per share after excluding one-time items, which is over twice the $0.22 per share loss in the corresponding period of the previous year.

Revenue for the third quarter declined 56.2% to $1.2 billion compared to the corresponding quarter of the previous year. Adjusted loss per share came in at $0.67. The top line, as well as the bottom line numbers for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) were below expectations. The third quarter was not different from the second quarter where the company gave a bleak outlook for the upcoming quarter, says a report from Seeking Alpha by Bill Maurer.

Balance sheet weakening for BlackBerry

A huge loss on the assets of the company caused some major effects on the balance sheet for the third quarter. In the second, as well as the third quarter, the asset base of the company declined from $12.5 billion to $8.4 billion.  BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) also took some debt during the quarter, which also affected the balance sheet to some extent.

The third quarter was very bleak as it failed to deliver on the revenue estimates. The beleaguered smartphone maker also suffered a loss on write downs and performed weak on the bottom line even though it excluded certain items.

Recently, a deal with Foxconn coincided with a surge in BlackBerry’s stock, but the surge may be due to short coverings, which stands at 33% from its recent 52-week low, and closed at its highest point since November 1st.

Even after the deal and some rebound in the stock, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is a loss making company with revenue problems and sales mainly constituted of older model phones. The balance sheet of the Canadian firm may look stable, as of now, due to the huge debt deal, but it won’t for very long unless something fundamentally changes.

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