BlackBerry Q1: Recovery, turnaround not going so well

Summary:BlackBerry's recovery hopes are losing promise, after its first-quarter earnings missed analyst expectations by a long shot.

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BlackBerry CEO Thorsten Heins at the launch of BlackBerry 10 in January. Image: CNET

BlackBerry's recovery is not looking as good as many had hoped, just six months after launching its next-generation line of BlackBerry 10 smartphones.

The company reported on Friday a first-quarter loss of 16 cents a share on revenue of $3.1 billion. Compared to the same quarter last year, revenue is up from $2.8 billion — a 9 percent increase — but suffered an operating loss of $84 million.

Wall Street was expecting BlackBerry to report 6 cents per share on revenue of $3.36 billion.

The company said it shipped 6.8 million BlackBerry smartphones during the quarter ending June 1, up sequentially 13 percent from the previous quarter, but didn't break out the BlackBerry 10 figures. The firm also shipped 100,000 BlackBerry PlayBook tablets.

BlackBerry ended the quarter with $3.1 billion in cash and investments, a 7 percent increase from the previous quarter.

BlackBerry chief executive Thorsten Heins said the company "continued to focus [its] efforts on the global roll out of the BlackBerry 10 platform." Heins expanded in prepared remarks:

We are still in the early stages of this launch, but already, the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving themselves to customers to be very secure, flexible, and dynamic mobile computing solutions. Over the next three quarters, we will be increasing our investments to support the rollout of new products and services, and to demonstrate that BlackBerry has established itself as a leading and vibrant player in next-generation mobile computing solutions for both consumer and enterprise customers.

In the year to date, the company's share price has remained erratic. On Friday, following the earnings report, BlackBerry ($BBRY) was down by more than 19 percent in premarket trading.

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$BBRY in premarket trading following its first-quarter earnings report. Image: Google Finance

Looking ahead, the smartphone maker said it expects a bumpy road in the coming quarters. BlackBerry said it expects a loss for the second quarter, as the smartphone market remains "highly competitive."

Topics: BlackBerry

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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