Blackberry Foxconn Partnership
Its been a tough year for Blackberry (NASDAQ:BBRY) shareholders, it seems like every other day some headline hit the wires and in turn moved the stock. The majority of the headlines in recent months haven’t been too excited for the determined shareholder base. Declining sales, falling relevance, and increasingly high cash burn has weighed on traders and investors alike. At times it seemed like there was no end in sight, but on Friday morning shareholders were welcomed to some startling high returns.
Analysts had been expecting a pretty ugly quarter by all comparable means. Blackberry reported a net loss of 67 cents a share, further in the red than the loss of 43 cents a share analysts had expected. On the top line the company generated revenue of $1.2 billion, 56% lower than a year ago while missing consensus estimates by $460 million.
At first glance most investors were taken back by the startlingly terrible quarter. However, the company did have some significant news up its sleeve. Though earnings were off by more than $0.20 per share, details of a new deal with Foxconn (TWSE:2317) inspired hope the company could turn itself around.
BlackBerry announced it had entered into a five-year strategic partnership with the electronics manufacturer to develop devices for emerging markets, beginning with Indonesia in early 2014. Foxconn has long been a favorite of technology giant Apple, and Blackberry feels the company could offer a strategic manufacturing alternative for its lower end phones.
In a statement following the news, Chief Executive Officer, John Chen, had this to say about the deal:
“Partnering with Foxconn allows BlackBerry to focus on what we do best … iconic design, world-class security, software development and enterprise mobility management — while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively,”
Time will tell, maybe the new partnership can help save the dying technology giant. At the time of this writing shares of the company were higher by an astounding 15 percent to $7.22 per share.
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