TORONTO (AP) -- BlackBerry said Friday that it is committed to completing a series of major changes quickly after posting a nearly billion-dollar loss and a 45 percent drop in revenue for the second quarter.
"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," Thorsten Heins, the chief executive officer, said in a statement.
"We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. 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."
The troubled smartphone company reported a loss of $965 million and revenue of $1.6 billion, in line with what it warned when it surprised the market by releasing dismal earnings projections last week and announcing 4,500 layoffs. A year ago, it lost $235 million on revenue of $2.9 billion.
The company had announced Monday that Fairfax Financial Holdings Ltd., BlackBerry's largest shareholder, is making a tentative $4.7 billion offer to buy the company and is trying to attract other investors.
BlackBerry cancelled its previously scheduled Friday conference call with analysts in light of that overture.
The adjusted loss was $248 million, or 47 cents per share, in the latest quarter. Analysts surveyed by FactSet had expected an adjusted loss of 16 cents per share.
The head of Fairfax Financial Holdings, Prem Watsa, told The Associated Press this week he has every intention of completing the acquisition of BlackBerry, despite doubts that the deal will go through. Fairfax signed a letter of intent that "contemplates" buying BlackBerry for $9 a share.
Watsa said Fairfax won't be contributing more to the bid than the 10 percent it already owns. The deal is subject to six weeks of due diligence and there is no breakup fee for BlackBerry should Fairfax walk away. The stock has been trading around a dollar less than the $9 bid on fears the deal won't happen.
BGC analyst Colin Gillis said the conditional offer is skewed in Watsa's favor, noting Fairfax is not putting in more equity into the deal and is allowed to bring in other unnamed investors. "He's putting up nothing and he's getting something," Gillis said.
Analysts say that although BlackBerry's hardware business is not worth much, the company still has a smartphone service business where it manages BlackBerrys and competing smartphones on its network. The service business brought in 46 percent of BlackBerry's $1.6 billion in revenue in the quarter. The company also owns valuable patents. BlackBerry is also strong in having total cash and investments of about $2.6 billion, with no debt, though it's burning through that stockpile. In just the past few months, it's spent more than half a billion dollars.
Its U.S.-traded shares closed up 8 cents at $8.03 Friday -- nearly $1 per share less than the buyout price suggested by Fairfax.
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