BlackBerry downplays Priv sales as its third-quarter results beat expectations

WATERLOO, Ont. -- If BlackBerry's latest Priv smartphones are flying off shelves, the company isn't boasting about it.

With about a month of sales for the new device under its belt, BlackBerry was vague Friday about how its first Android smartphone has performed so far in the marketplace.

See Full Article

"Numbers will tell us but the initial 30 days, so to speak, has been quite positive, and I don't want to over hype that situation," chief executive John Chen told analysts Friday as BlackBerry delivered better-than-expected financial results.

Chen decided not to provide specific Priv sales figures, emphasizing that its availability will spike to 31 countries by the end of February when the company's fourth-quarter ends, from the initial four countries in the third quarter ended Nov. 28.

The lack of detail prevents investors from getting a clear picture of how many people bought the phone shortly after its launch. However, BlackBerry did provide some information by releasing its usual tally for all device sales, including the Passport and other older models that use the company's own operating system.

About 700,000 devices were sold, which is a steep decline from 1.9 million at the same time last year and also down from 800,000 in the second quarter of this year. But the average sales price jumped to $315 from $240, suggesting a large quantity of sales came from more expensive Priv phones.

BlackBerry (TSX:BB) (Nasdaq:BBRY) shares were nearly nine per cent higher in early Friday trading on the TSX as investors digested the latest financial report, which showed revenue came in above expectations and its loss was far less than anticipated.

The company's net loss was US$89 million or 17 cents per share under standard accounting rules.

After adjustments, BlackBerry lost US$15 million or three cents per share -- far less than analyst expectations of a loss of 14 cents per share, according to Thomson Reuters.

Revenue was US$557 million, a slight improvement from $548 million a year ago and about $64 million more than analyst predictions.

Within its divisions, the shift away from an emphasis on phone sales continued.

Software and services revenue more than doubled to $154 million from $57 million a year ago, driven by the recent acquisition of Good Technology Corp.

Hardware revenues, which account for device sales, dropped to $214 million from $361 million a year ago.

BlackBerry has been relying on the Priv as the golden ticket to make its hardware business profitable again.

"Depending on how Priv does ... there is a chance we could achieve or get closer to breakeven operating profitability for our overall device business in the (fourth) quarter," Chen said.

He also told analysts he expects the company's fourth-quarter results to outdo their current expectations, which predict an adjusted loss of 11 cents per share.

BlackBerry, a pioneer of smartphone industry and the former market leader, lost that position years ago as competitors like Apple's iPhone and Samsung's Galaxy attracted the majority of its longtime users.

The Priv is BlackBerry's most aggressive attempt to bring some of those customers back. Reviews for the device have been mixed to positive and the company has been criticized for pricing the phone well above other Android devices on the market.

When BlackBerry's competitors introduce new devices next year the company will likely have to reduce the price of the Priv to be competitive, Chen said.

"We obviously won't fool ourselves to expect we'll continue to maintain the high prices that we could get today," he said.

In early trading, BlackBerry shares were ahead 98 cents to C$11.87 on the Toronto Stock Exchange.



Advertisements

Latest Economic News

  • Canadian labour leader Bob White, instrumental in creating CAW, dies

    Economic CTV News
    TORONTO - Canadian labour leader Bob White has died. White was instrumental in creating the Canadian Auto Workers union, which broke away from its American parent in the mid-1980s. He was the CAW's founding president from 1985 until 1991 -- a period when the union was at the height of its power, representing most of the Canadian employees of the big U.S. Source
  • Bob White, 'true maverick' former president of Canadian Auto Workers, dies

    Economic CBC News
    Bob White, the Canadian union leader who founded the Canadian Auto Workers after splitting off from its American counterpart, has died at the age of 81. Unifor, the union which now encompasses the Canadian Auto Workers, tweeted that White was "a great union leader. Source
  • Wholesale trade rise 0.7% in December for third straight monthly gain

    Economic CTV News
    OTTAWA -- Canadian wholesale trade grew 0.7 per cent to $57.3 billion in December, registering its third consecutive monthly gain. Statistics Canada says sales in categories such as machinery, equipment and supplies, as well as building material and supplies were the biggest contributors to the increase. Source
  • China, Canada face similar pension challenges: CEO of CPP Investment Board

    Economic CTV News
    BEIJING -- The top executive at Canada's largest retirement fund is in Beijing today to help grow the fund's relationship with Chinese pension officials. Mark Machin was on hand for the official launch of a Chinese translation of "Fixing the Future" -- a book tracing the political and financial hurdles that were overcome when the Canada Pension Plan Investment Board was created in the 1990s. Source
  • Unilever shares tumble as Kraft Heinz drops takeover bid

    Economic CBC News
    Kraft Heinz Co.'s rapid retreat from its surprise $143 billion US bid for Unilever in the face of stiff resistance knocked the Anglo-Dutch company's shares on Monday as investors assessed the impact of the failed approach. Source
  • Hong Kong Disneyland posts 2016 loss on tourism softness

    Economic CTV News
    Hong Kong Disneyland posted a wider annual loss on Monday as attendance by mainland Chinese tourists dropped amid a softer tourism market. The park said it lost 171 million Hong Kong dollars (US$22 million) on revenue of HK$4.8 billion for its most recent financial year, which ended Oct. Source
  • Unilever shares slide after Kraft Heinz withdraws US$143B bid

    Economic CTV News
    NEW YORK -- Shares in Unilever, the owner of brands like Hellman's, Lipton, and Knorr, are down sharply after rival Kraft Heinz withdrew a US$143 billion takeover offer. The companies said Sunday in a joint press release that Kraft Heinz has "amicably" abandoned the offer. Source
  • Quebec turns up the maple syrup taps amid internal revolt, foreign competition

    Economic CTV News
    MONTREAL -- Quebec, the world's largest producer of maple syrup, is ramping up output as it fends off rising competition from the U.S. and neighbouring provinces as well as a farmer rebellion from within. The province is adding five million taps over the next two years to its existing 43 million spigots. Source
  • Mortgage math: Rates aren't everything, don't forget to consider term

    Economic CTV News
    OTTAWA -- You shopped around for the best deal on your mortgage and weighed the pros and cons of going with a fixed-rate or a variable-rate loan, but another key factor to consider is the term. Source
  • Plutocrats with their crony capitalism are taking over again in the U.S.: Don Pittis

    Economic CBC News
    Can one of the richest cabinets in White House history since the late-19th-century Gilded Age make the United States equal again? Many have their doubts. In fact there are signs that instead, the U.S. Source