WATERLOO, Ont. – BlackBerry chief executive John Chen is frustrated by negative investor reaction to the smartphone company’s latest quarterly results, which he says are within the parameters of the plan he has outlined for months.
“They’re not listening to what I said,” Chen told a roundtable of reporters Friday from the company’s head office in Waterloo, Ont., after posting third-quarter financial results.
“They’re giving me credit for being more of a super-human being than I really am.”
The head of BlackBerry, who was brought in just over a year ago to make the money-losing operation profitable, zeroed in on the investment community, saying analysts boosted their expectations for BlackBerry’s revenue higher than they should have.
“We told them that this quarter the revenue would be lower, and none of them listened — they jacked their revenue up,” he said.
“There’s a level of frustration on our part that they don’t understand the steps we have to go through to strengthen the balance sheets.”
Earlier in the day, BlackBerry Ltd. (TSX:BB) delivered a financial report showing progress was being made in improving the bottom line. But investors focused mainly on weakness in the company’s revenue.
Shares of the company dropped as much as 10 per cent shortly after the results were released, recovering most of the decline later in the day. BlackBerry stock ended down 12 cents or one per cent at C$11.55 on the Toronto Stock Exchange.
In the third quarter, BlackBerry posted US$793 million in revenue, versus analyst predictions of US$931 million, and down from $1.19 billion a year ago.
Net losses were narrowed to US$148 million, equivalent to 28 cents per share, compared with a far deeper loss of US$4.4 billion or US$8.39 per share in the same period a year ago.
On an adjusted basis, the smartphone maker delivered a small profit of $6 million, or one cent per share, beating expectations of an adjusted loss of five cents per share, according to data compiled by Thomson Reuters.
BlackBerry recognized revenue on 1.9 million devices in the quarter, which compared with 2.1 million phones sold during the second quarter.
The pullback offers another sign of shifting priorities at the company as services and software revenues begin to eclipse the money it’s garnering from handsets. During the period, 46 per cent of revenue came from phones, while another 46 per cent was from services it offers and eight per cent from software.
Sales of BlackBerrys slipped 10 per cent in the three months ended Nov. 29, a period which saw the company introduce the large-screen Passport model as a way to slow the rapid decline of its smartphone customer base.
The period was also characterized by BlackBerry selling off its inventory of older devices, sometimes at deep discounts. About 93 per cent of the old products have been removed from its stock, Chen said.
Chen aims to double its revenues from software in its next financial year, starting in March, helped by the launch of the next generation of its BlackBerry Enterprise Service software, called BES12.
Earlier this week, BlackBerry launched the Classic model, a throwback to its popular older smartphones, but with an updated design and features.
Chen told analysts that early orders for the Classic “are ahead” of the Passport smartphone that was released three months ago. While Chen didn’t provide sales figures for the Classic, about 200,000 Passport phones had been sold in its first few days of release, mostly through pre-orders, suggesting the Classic has sold more.
BlackBerry is also making some headway in bringing corporate customers back on side, Chen said.
The company reported that 30 per cent of subscribers to its BES10 offering, which provides security and services for corporate users, had migrated from competitors in mobile device management.
BlackBerry has also partnered with Boeing to develop a higher-level security platform for the Boeing Black smartphone, which was designed specifically for defence and security customers, like the U.S. Department of Defense.
“We see the need for end-to-end, layered security in the mobile ecosystem that supports our defence and security customers,” said Boeing spokesman Andrew Lee in an email.
Chen told analysts on a conference call that the technology will be installed on Android smartphones using BES12.
“That, by the way, is all they allow me to say,” he added.
Follow @dj_friend on Twitter
Note to readers: This is a corrected story: A previous version included an incorrect figure for year-ago loss comparison. The correct figure is $4.4 billion.