BlackBerry hit with $934m inventory charge over unsold Z10 smartphones
BlackBerry losses mount as company forced to count cost of unshipped Z10 smartphones.
BlackBerry has been forced to write-off $934 million in its second quarter results after failing to shift enough Z10 smartphones.
The company made a loss of $965 million during the three months to 31 August 2013, dwarfing the $84 million loss BlackBerry made during the previous quarter.
This is against revenue of $1.6 billion, after the firm shipped just 5.9 million devices during Q2.
We are very disappointed with our operational and financial results this quarter.
It has confirmed only revenue from 3.7 million of these devices has been recognised during the quarter, because the rest of them are yet to be sold through to end customers.
The majority of the recognised devices were BlackBerry 7 smartphones, the company revealed.
Overall, revenue was down 45 per cent compared with the same quarter last year, when the firm banked $2.9 billion.
The bulk of the firm's $965 million loss can be attributed to the fact the firm has had to swallow a $934 million inventory charge during Q2 because of its unsold Z10 stock.
The write-off is major blow for the firm, after it repeatedly hailed the Z10 as a device that could reverse its fortunes, and help it regain its footing as a dominant player in the smartphone market.
In a statement, Thorsten Heins, president and CEO of BlackBerry, expressed his disappointment at the results, but insisted the company was still in a strong financial position.
"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," said Heins.
The results mark the end of a tumultuous month for BlackBerry, which has seen it announce job cuts, mull over a $4.7 billion bid by one of its largest shareholders to take the firm private and delay the release of its highly-anticipated BBM for Android and iPhone app.
As reported by IT Pro yesterday, the company has also been forced to deny that it was planning to turn its back on the consumer market, as it prepares for the launch of its new Z30 smartphone.
However, Heins said there were a few bright spots on the horizon for the firm, thanks to the growing adoption of its BlackBerry Enterprise Server 10 platform by business customers.
"We understand how some of the activities were are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt," he said.
"We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."
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