BlackBerry Reports First Quarter Results for Fiscal 2015

wpid-blackberry-building-600x450.jpg

BlackBerry have posted their first quarterly report for the financial year 2015.  BlackBerry reported $966 million in revenue, with cash flow of $3.1 billion with an approx of 2.6 million BlackBerry devices sold through to end customers.

In the last 3 months, a lot has happened for BlackBerry including the release of the BlackBerry Z3, announcing big players picking up BES10, the launch of eBBM and BBM Protected and a partnership announcement with Amazon.

Analysts had EPS expectations of  -$0.11  which BlackBerry beat by $0.15, they also beat revenue by $2.83m. They also predicted a loss in profit, which infact, BlackBerry posted a $23 million profit from revenue.

Read the press release below:

June 19, 2014

BlackBerry Reports 2015 Fiscal First Quarter GAAP Profitability
WATERLOO, ONTARIO–(Marketwired – June 19, 2014) – BlackBerry Limited (NASDAQ:BBRY)(TSX:BB), a global leader in mobile communications, today reported financial results for the three months ended May 31, 2014 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Q1 Highlights:
— Cash and investments balance of $3.1 billion at the end of the fiscal
first quarter, up from $2.7 billion in the prior quarter
— Adjusted Q1 gross margin of 48%, up from 43% in the prior quarter
— Reduced adjusted operating expenses by 57% year over year and 13%
quarter over quarter
— Successfully launched the new Z3 device in Indonesia; 8 additional
countries to follow
— EZ Pass Program resulted in a total of 1.2 million licenses issued for
BES10, including more than 10% of total licenses traded in from
competitors’ Mobile Device Management platforms
— Launched Project Ion focused on the “Internet of Things” market

Q1 Results

Revenue for the first quarter of fiscal 2015 was $966 million, down $10 million or 1% from $976 million in the previous quarter. The revenue breakdown for the quarter was approximately 39% for hardware, 54% for services and 7% for software and other revenue. During the first quarter, the Company recognized hardware revenue on approximately 1.6 million BlackBerry smartphones compared to approximately 1.3 million BlackBerry smartphones in the previous quarter. During the first quarter, approximately 2.6 million BlackBerry smartphones were sold through to end customers, which included shipments made and recognized prior to the first quarter and which reduced the Company’s inventory in channel.

GAAP net income for the first quarter was $23 million, or $0.04 earnings per share (“EPS”). The net income includes non-cash income associated with the change in the fair value of the Debentures of $287 million (the “Q1 Fiscal 2015 Debentures Fair Value Adjustment”) and pre-tax restructuring charges of $226 million related to the Cost Optimization and Resource Efficiency (“CORE”) program. Excluding these items, adjusted loss for the first quarter was $60 million, or $0.11 per share. These impacts on GAAP net income and EPS are summarized in the table below.

The total of cash, cash equivalents, short-term and long-term investments was $3.1 billion as of May 31, 2014, compared to $2.7 billion at the end of the previous quarter – a net increase of $429 million. Excluding receipt of a tax refund of $397 million and proceeds on the sale of real estate of $287 million, the Company used $255 million in the first quarter. This represents a decrease from $784 million used last quarter, after excluding proceeds of $250 million related to convertible debt issuance. Purchase obligations and other commitments amounted to approximately $1.8 billion as at May 31, 2014, with purchase orders with contract manufacturers representing approximately $317 million of the total.

“Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio,” said John Chen, Executive Chairman and Chief Executive Officer of BlackBerry. “Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement. Looking forward, we are focusing on our growth plan to enable our return to profitability.”

Outlook

The Company anticipates maintaining its strong cash position, while increasingly looking for opportunities to prudently invest in growth. The Company is targeting break-even cash flow results by the end of fiscal 2015.

Reconciliation of GAAP gross margin, gross margin percentage, loss before income taxes, and net income to adjusted gross margin, adjusted gross margin percentage, adjusted loss before income taxes, adjusted net loss and adjusted loss per share:

(United States dollars, in millions except per share data)
Gross
margin(1) Gross margin Loss before Earnings
(before %(1)(before income Net income (loss) per
taxes) taxes) taxes (loss) share
————————————————————-
As reported $ 451 47% $ (6) $ 23 $ 0.04
Adjustments:
CORE charges
(2) 12 1% 226 204
Q1 Fiscal 2015
Debenture Fair
Value
Adjustment (3) – -% (287) (287)
————————————————————-
Adjusted $ 463 48% $ (67) $ (60) $ (0.11)
————————————————————-
————————————————————-

Note: Adjusted gross margin, adjusted gross margin percentage, adjusted loss before income taxes, adjusted net loss and adjusted loss per share do not have a standardized meaning prescribed by GAAP and thus are not comparable to similarly titled measures presented by other issuers. The Company believes that the presentation of these non-GAAP measures enables the Company and its shareholders to better assess the Company’s operating results relative to its operating results in prior periods and improves the comparability of the information presented. Investors should consider these non-GAAP measures in the context of the Company’s GAAP results.
(1) During the first quarter of fiscal 2015, the Company reported GAAP
gross margin of $451 million or 47% of revenue. Excluding the impact
of the CORE charges included in cost of sales, the adjusted gross
margin was $463 million, or 48%.
(2) During the first quarter of fiscal 2015, the Company incurred charges
related to the CORE program of $226 million pre-tax, or $204 million
after tax, of which $12 million were included in cost of sales, $41
million were included in research and development and $173 million
were included in selling, marketing, and administration expenses.
(3) During the first quarter of fiscal 2015, the Company recorded the Q1
Fiscal 2015 Debentures Fair Value Adjustment of $287 million. This
adjustment was presented on a separate line in the Consolidated
Statement of Operations.

Supplementary Geographic Revenue Breakdown
Blackberry Limited
(United States dollars, in millions)
Revenue by Region

For the quarter ended
———————————————————-
May 31, 2014 March 1, 2014 November 30, 2013
———————————————————-
North America $ 276 28.6% $ 297 30.4% $ 340 28.5%
Europe, Middle
East and Africa 414 42.9% 412 42.2% 549 46.0%
Latin America 125 12.9% 127 13.0% 135 11.3%
Asia Pacific 151 15.6% 140 14.4% 169 14.2%
—————– ————————————-
Total $ 966 100.0% $ 976 100.0% $ 1,193 100.0%
———————————————————-
———————————————————-

For the quarter ended
—————————————
August 31, 2013 June 1, 2013
—————————————
North America $ 414 26.3% $ 761 24.8%
Europe, Middle
East and Africa 686 43.6% 1,343 43.7%
Latin America 196 12.5% 449 14.6%
Asia Pacific 277 17.6% 518 16.9%
—————————————
Total $ 1,573 100.0% $ 3,071 100.0%
—————————————
—————————————

Conference Call and Webcast

A conference call and live webcast will be held beginning at 8 am ET, which can be accessed by dialing 1-877-974-0445 or through your BlackBerry(R) 10 smartphone, personal computer or BlackBerry(R) PlayBook(TM) tablet at http://ca.blackberry.com/company/investors/events.html. A replay of the conference call will also be available at approximately 10 am by dialing (+1)416-640-1917 and entering pass code 4680440# or by clicking the link above on your BlackBerry(R) 10 smartphone, personal computer or BlackBerry(R) PlayBook(TM) tablet. This replay will be available until midnight ET July 4, 2014.

 

Leave a Reply