BlackBerry reports big loss; burns more cash

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SAN FRANCISCO — BlackBerry Ltd. reported a major net loss for its second fiscal quarter Friday and disclosed a higher rate of cash burn, as sales of its newest smartphones have stalled.

The results were mostly in line with a dismal pre-announcement made by BlackBerry a week earlier. The company is not holding its customary earnings call, citing a pending buyout offer from Fairfax Financial for a proposed $9 per share.

BlackBerry's stock is well below the offer price from Fairfax, as several analysts have expressed doubt that the offer will be completed at that price, given that Fairfax still has to line up partners and financial backing.

A new metric in Friday's release was the fact that BlackBerry's operations consumed about $136 million in cash, compared to cash flow from operations of $630 million in the previous quarter that ended June 1. Cash and equivalents on hand by the end of the quarter totaled $2.6 billion -- compared to $3.1 billion as of June 1.

Notably missing from Friday's report was the number of subscribers still using BlackBerry devices. The company said in its last earnings call on June 28 that it would no longer give this number out, saying that since its newer BlackBerry 10 devices generated less service revenue, the subscriber number was less reflective of its business. In that quarter, BlackBerry's subscriber level dropped by 4 million users sequentially to 72 million by the end of the period.

For the quarter ended Aug. 31, BlackBerry reported revenue of $1.6 billion with a net loss of $965 million, or $1.84 per share, compared to revenue of $2.9 billion and a loss of $229 million, or 44 cents a share, for the same period last year.

Sales slid in every geography, with revenues from North America down to $414 million from $761 million in the previous quarter.

The company said its adjusted net loss from continuing operations was $248 million, or 47 cents per share -- on the low side of the estimated range it gave last week. This figure excludes a $934 million charge against inventory of its new Z10 smartphone, as well as about $72 million in restructuring costs.

"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," BlackBerry CEO Thorsten Heins said in a statement.