BlackBerry reported a steep drop in revenue and a widening loss as sales of its smartphones continue to slide.
The smartphone maker says it lost $423 million US in the fourth quarter of fiscal 2014, as revenue for the three-month period fell to $976 million — a 64 per cent decline from $2.68 billion a year earlier.
It's the first time since late 2007 that the company's quarterly revenue has dipped below $1 billion.
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The smartphone maker said the loss amounted to 80 cents a share compared with a profit of $98 million or 19 cents per share a year ago.
But excluding several one-time items, BlackBerry said it had an adjusted loss from continuing operations of $42 million or eight cents per share for the quarter. That beat analyst expectations, which called for a per share loss of 57 cents.
At the start of trading on the Nasdaq, BlackBerry shares were up 3.6 per cent to $9.38 US, a 33 cent jump.
The smartphone maker reported $6.8 billion in revenue for the fiscal year, down 38 per cent from $11.1 billion in the previous year.
'[It's] very important that the market knows that we're here and we want to fight."' - John Chen, BlackBerry CEO
However, the company said its margins grew to 43 per cent, an increase from 34 per cent in the third quarter.
But sales of phones continued to slide. The company sold 3.4 million smartphones to customers in the fourth quarter, and of those 2.3 million phones were BlackBerry 7 devices, not the company's newer Z10, Z30 and Q10 devices.
BlackBerry sold just 1.1 million of its newer devices, lower than analyst expectations of 1.3 million.
As a result of this, chief executive John Chen said in a conference call with investors that the company will restart production of the BlackBerry Bold, one of the company’s most popular phones.
The phone, first introduced in 2011, will be re-released as “The Classic”.
He says the devices will be aimed at “true BlackBerry loyalists”, will be on sale by the end of the year, and will stay on sale as long as there’s demand for it.
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Since taking over the company's top job in November, Chen has been trying to boost the company’s services and software divisions, reducing its reliance on selling phones.
Earlier this week, the company revealed its plan to make money using its BBM chat service, using advertising, sponsored promotions, and a new BBM Store that will sell digital goods.
The revenue breakdown for the quarter included about 37 per cent from hardware, 56 per cent for services and seven per cent for software and other revenue.
Looking to break even
In its outlook, BlackBerry says it is targeting break even cash flow results by the end of its 2015 financial year — next March. Over the past quarter, the company's cash reserves shrank by $500 million.
At the beginning of March, the company says, it had $2.7 billion US in cash on its books, down from $3.2 billion at the end of November.
Earlier this month, BlackBerry announced it would sell the majority of its Canadian real estate, which should bring a temporary cash infusion in June, when the sale is expected to close.
Faced with mounting losses and high costs, the company cut 4,500 jobs in September — 40 per cent of its workforce.
In November, Chen took over and quickly implemented a two-year turnaround plan.
In an interview with Amanda Lang on CBC's The Lang & O'Leary Exchange, Chen says he's committed to the turnaround.
"I hope you see that in the last few months, we've been very focused on trying to tell our story, talking to the press, doing media interviews," Chen said.
"Normally I shouldn't be doing this. But I figure this is very important that the market knows that we're here and we want to fight."
The full interview will run Friday at 7 p.m. ET on The Lang & O'Leary Exchange on CBC News Network.
In the conference call, Chen said the plan is on track, and may even be ahead of schedule. Use of cash for operational costs are down 30 per cent in the past quarter alone.
"The guy is on the move fast," said Colin Gillis, an analyst at BGC Partners. "He can control expenses, but you can't magically make revenue happen."