task

REPORT EARNINGS - FY: 2014 - QTR: 04

[what]

] a brief summary of the latest financial results from this company.

[why]

] Attempting to make sense of long, complicated and boring earnings report calls, financial statements and related mumbo jumbo

[where - $$$ and numbers]

] $ REVENUE

] 976 m, down $217 million or 18% from approximately $1.2 billion in the previous quarter and down 64% from $2.7 billion in the same quarter of fiscal 2013. 12% less than the 1.1 B analysts expected.
] 37% for hardware, 56% for services and 7% for software and other revenue.

] $ PROFIT/LOSS on operations

] $ 423 million - LOSS ( revenue - expenses)
] $ 0.80 per share

] CASH BALANCE

] $ 2.7 B cash on books, DOWN .5 B from 3.2 B in previous qtr
] .250 B convertible debenture, w/out debentures issued, the burn would be .75 B ( which is why there is big move to sell real estate holdings)

] DEVICES - sales - units

] bb 10 - 1.1 million devices "
] bb 7 - 2.3 million devices
] total = 3.4 million were sold through to customers
*] "recognized revenue" on 1.3 m devices, down from 1.9m devices previous qtr

[where - announcments and analysis]

] gross margin up to 43% from 34% in previous quarter
] channel inventory down 30%
] cost of devices declined
] reduced operating expenses by 51% from Q1 FY 2014
] the most immediate challenge for the Company is how to transition the Devices operations to a more profitable business model

[when]

] 2014-03-28

[reference]

] http://ca.blackberry.com/content/dam/bbCompany/Desktop/Global/PDF/Investors/Documents/2014/Q4_FY2014_Press_Release.pdf
] http://crackberry.com/here-s-what-matters-blackberry-q4-financial-results-conference-call
] http://business.financialpost.com/2014/03/28/blackberry-ltd-results-q4-friday/?__lsa=6b32-106f
] FP interview with J.Chen post earnings report

[chris umiastowski @ crackberry.com]

- CHEN is a great communicator. He doesn’t dance around issues. He doesn’t duck questions. In fact he brings up most of the big issues as part of his prepared remarks.

- STOCK the stock is trading up very slightly (less than 3%) as I write this. What does that mean? It means the good news and bad news were about equal. For a volatile tech stock to move less than 3% is, in my opinion, a non-event. In other words, BlackBerry is still a story that requires a wait-and-see attitude.

- op expenses down 29%, 601M vs 845M, cut from r&d and sg&a(marketing)
- EARNINGS LOSS .08 per share (< the expected .55)

- NEXT QTR GUID - hang on to cash, service rev decline continuing, offset BIS by more BES licence sales, monetize free svc like BBM, plan for BBM protect, enterprise service geared towards regulated industries. This eBBM client will also be able to message the broader consumer BBM community as opposed to being locked to just the enterprise

BBM user base is now at 85 million, up from 80 million last time they reported a number. Growth seems to have stalled. They’re working on pre-installing the app on Nokia Lumia and LG branded phones, among others. I think they need to find a way to dramatically accelerate BBM growth.

We’re going to be waiting until later this year to see how much traction BlackBerry gets with BES12, and its enterprise growth initiatives. In the meantime it seems they’re well on their way to getting the hardware business to break even

They’re still burning some, but this should decelerate. The big question is … how fast? If they can’t stem the bleeding of subscribers I think it’s possible that we’ll be questioning the words “strong cash balance” in 6-9 months. It’s starting to look very much like the convertible debenture was essential for the company’s survival.

As scary as the picture looks, I’m encouraged by John Chen’s leadership. I think he’s building a strong culture of execution. It’s clear they have a strong niche position in the market. I really hope to see them meet their growth goals and return to financial health.

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