BlackBerry shares plunge on weak results, sales

BlackBerry on Friday posted an unexpected first quarter loss and disappointing sales figures for its new smartphones, sending its share price tumbling as confidence in its vaunted turnaround waned. The Waterloo, Ontario firm announced an $84 million loss in the first quarter ended June 1, compared with a loss of $518 million in the same period a year earlier. Revenues topped $3.1 billion, up nine percent. Analysts, however, had expected a seven cents per share profit instead of a 13 cents per share loss. The results came after the company rolled out new smartphones based on the new BlackBerry 10 platform, seen as its best hope at regaining traction after suffering staggering losses in market share in recent years. The group said it shipped 6.8 million smartphones in the quarter, 13 percent more than in last quarter. This includes 2.7 million of its new touchscreen Z10 and Q10 with a small keyboard launched earlier this year, missing analysts' targets. By comparison, Apple shipped 37.4 million iPhones in its last quarter, up slightly from a year ago. BlackBerry's stock price as a result slumped nearly 28 percent to $10.46 at the end of the day's trading in New York, returning to levels last year when the outlook for the pioneer of mobile computing was at its bleakest. "I can't imagine anyone is happy with BlackBerry performance except maybe BlackBerry competitors," said independent industry analyst Jeff Kagan. "Can BlackBerry turn things around with their new Q10, the keyboard device that just launched? Hopefully yes, but to tell you the truth hopes are dimmed by this first quarter performance," he said. BlackBerry chief executive Thorsten Heins said in a statement he planned to boost spending on marketing new products and services over the next three quarters, and has $3.1 billion in cash available to use as of June 1. "We are in the early stages of this (BlackBerry 10) launch," he told a conference call. "I'm confident in the future of BlackBerry 10 but there's lots of work to do," he said. "This is a marathon. And with the financials that we have under our belt, we are ready to run that marathon." However, Heins also warned of more losses coming in the second quarter before BlackBerry's fortunes get rosier. The company meanwhile noted that "the smartphone market remains highly competitive, making it difficult to estimate units, revenue and levels of profitability." BlackBerry subscribers who pay monthly fees for data and security services also fell by four million to 72 million in the quarter. In the future, the company said it would no longer share those figures as they become less relevant to its bottom line. While BlackBerry helped create a culture of mobile users who were glued to the company's smartphones, many of those customers have since moved to Apple or other smartphone makers such as Samsung, mainly using the Google Android operating system. In a turnaround bid, the company unveiled its new platform on January 30, as it dropped the corporate name Research in Motion to rebrand as BlackBerry, but staggered sales launches across regions. The Z10 was only launched in the key US market in March while the Z10 followed after the end of the first quarter.