BlackBerry's smartphone business has been a pale shadow of its former self ever since the popularity of Android and iOS-based full-touch smartphones shrunk the market for devices with physical keypads dramatically. While the company has taken a number of steps over the past few years to resurrect its troubled business back to its glory days, they are yet to pay off in any meaningful way thus far. Some commentators and observers had expected the company to make up some ground with the launch of its first Android smartphone last year, but ever since its launch, various reports have indicated that the BlackBerry Priv has just not sold in high-enough numbers to pull the company out of the rut it has gotten into over the years.
That being the case, the company's CEO, Mr. John Chen, recently read the riot act, declaring that the company's hardware division simply needs to get back to profitability by the end of this year. In the meantime though, the losses have continued to pile up on the balance sheet, and the company has once again now come out with a disappointing set of numbers that reveals a loss of $670 million during the first three months of the current fiscal year. According to its financial report for Q1, FY2017, BlackBerry's revenues for the quarter stood at $424 million, which represents a decline of $234 million from the corresponding period last year, when the company reported revenues of $658 million.
However, even among all the doom and gloom that this particular report is supposed to bring to BlackBerry shareholders, the company's stock actually rose more than 4% on NASDAQ in pre-market trading on Thursday. That's because the company actually posted an operating profit of $14 million excluding one-time impairment charges and inventory write-downs at a time when analysts were actually expecting the company to lose around 8 cents per share on revenues of $470 million. The loss is on account of a "long lived asset impairment charge of $501 million, a $57 million goodwill impairment charge and inventory write-down of $41 million". The smartphone division of the company also lost $21 million during the three-month period in question. Meanwhile, Mr. Chen, also revealed that around 500,000 units of the Priv were sold during the quarter worldwide. He also said that he expects the company to break even on an operational basis by Q3, FY2017.