June 28 - Few signs of a long-promised BlackBerry turnaround and an unexpected quarterly loss send the stock down. Fred Katayama reports.
TV AND WEB RESTRICTIONS~** **~ This was the supposed to be the turnaround quarter, but BlackBerry's surprisingly weak first quarter results could reverse its recent stock gains and make it a cheap takeover target. The mobile phone maker posted an operating loss of 67 million dollars when Wall Street had expected a profit, and it missed forecasts on revenues and phone shipments as well. BlackBerry partly blamed the loss on foreign exchange restrictions in Venezuela. And it warned it would post an operating loss in the current quarter. Also upsetting investors: the company failed to give an outlook on how many of its new BlackBerry 10 smartphones it would sell. This was the first full quarter of its touchscreen Z10 smartphone. BlackBerry has been betting that its new phones would help it win back market share. Its stock is coming under severe pressure today. RBC Capital Markets analyst Mark Sue wrote, "A full quarter of BlackBerry 10 sell-in should've resulted in better results. BlackBerry could be discounting new and older products, which explains the decline in margins. We expect stock to head down to lower end of trading bracket of $11-$18." The stock has more than doubled since late August. But it has also attracted a crowd of investors betting against the turnaround, and many of those short sellers could see a lot of black ink today off BlackBerry's woes.