[abouthsu]

Hi Morgan:

Based on your experience, what is the reasoning behind releasing the pre-er on a Friday with 25 minutes left for trading? Is it really to disclose info, so big boys can buy the shares? Are they even going to buy and hold, instead of driving it down further?

How do you think this pre-er move aligns with BBMx release this weekend, Prem Watsa, private equities, etc. (basically the overall corporate development)? Is this considered a progress to hear corp dev result even sooner?

Thank you

A few hours after and the effects are still lingerling. I too wonder why pre-er have to be on a friday with 25 mins left for trading plus XBBM launching this weekend? I swear this does not make any sense. what do the mgmt achieved or get out of this by doing it before XBBM and ER next week!!

Maybe there's rules of why they have to do this on a friday just before trading is about to close!! Any thoughts around this would be greatly appreciated.

[morganplus8]

Hi Morgan:

Based on your experience, what is the reasoning behind releasing the pre-er on a Friday with 25 minutes left for trading? Is it really to disclose info, so big boys can buy the shares? Are they even going to buy and hold, instead of driving it down further?

How do you think this pre-er move aligns with BBMx release this weekend, Prem Watsa, private equities, etc. (basically the overall corporate development)? Is this considered a progress to hear corp dev result even sooner?

Thank you

JLagoon!!

I can only guess, I have never seen a company halt a stock that late in the day and not keep it halted until the close. The news is incomplete, we don't know what Services were, we can't figure out how many BB 10 phones where in the 5.9 million handset number either. Without Services, we can't see if there is bleed in Subs or not. With services we could at least guess at Subs. That's their bread and butter. Then there is guidance, Heins told us we would be negative on earnings, are we still negative after these cuts and are they enough now to have back to back profitable quarters? Then there is the interest by other parties, we don't have anything to balance this clean up with. And so why would you halt your stock and open it up again for trading with a 1/2 hour to go knowing you gave us only 60% of the ER? I can't guess why this happened but it makes me think someone went hunting for shares prior to the BBM-X launch. Just guessing here!

[_dimi_]

Hi Morgan!

BlackBerry.com has the full press release. They estimate service revenue and provide the adjusted net loss. Is it correct to assume that this is the loss excluding the restructuring cost and inventory write down? Still pretty high, no? As always, thanks for the info!

-----

Preliminary Second Quarter Fiscal 2014 Results

The Company currently expects to report revenue for the second quarter of approximately $1.6 billion, of which approximately 50% is expected to be service revenue. For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognized until those devices are sold through to end customers. During the second quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company?s inventory in channel.

As a consequence of the more intense competition the Company is experiencing in its hardware business, it expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the
second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.

The current quarter will also include a pre-tax restructuring charge in the approximate amount of $72 million reflecting ongoing cost efficiency initiatives.

As previously disclosed, the Company anticipated generating an operating loss in the second quarter. The Company currently expects that its adjusted net loss, before giving effect to the inventory and restructuring provisions referred to above, will be in a range of approximately $250 million to $265 million, or $0.47 to $0.51 per diluted share. Including the inventory and restructuring provisions, the GAAP net loss is expected to be approximately $950 million to $995 million, or $1.81 to $1.90 per share. Adjusted gross margin is expected to be approximately 35-37 percent.

At the end of the second quarter, total cash, cash equivalents and investments is estimated to be approximately $2.6 billion. The Company has no debt.

The preliminary, unaudited information provided above is based on the Company?s current estimate of results from operations for the second quarter of Fiscal 2014 and remains subject to change based on the Company?s ongoing review of results, the subsequent occurrence or identification of events prior to closing of the review and any further adjustments made in connection with closing and review procedures. All figures in this release are in U.S. dollars and U.S. GAAP, except where otherwise indicated.

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[morganplus8]

[/U]abouthsu;9203021]A few hours after and the effects are still lingerling. I too wonder why pre-er have to be on a friday with 25 mins left for trading plus XBBM launching this weekend? I swear this does not make any sense. what do the mgmt achieved or get out of this by doing it before XBBM and ER next week!!

Maybe there's rules of why they have to do this on a friday just before trading is about to close!! Any thoughts around this would be greatly appreciated.

I agree! I don't see anything in this report that looks like it deserves special treatment here. They claim $ 1.6 Billion revenues on 3.7 million handsets but they are leaving out 2.2 million handsets due to a new method of claiming revenues post payment. This is a one time thing because the next quarter they will add in 2.2 million handsets at $ 450 each and inflate those numbers. In addition, they didn't breakout Services so we have to guess that they are around $ 800 million so that leaves $ 800 million for handsets of 3.7 million. Do you see how the market would be frightened by this method of accounting? That's an average of $ 215.00/handset which is very low. Still, when you back out inventory write downs which is non cash, you get a quarter that was breakeven or a slight loss. So why the hurry reporting this non-event? The only thing we don't know is Subs and they don't want to talk about them. So there you have it, they created a ton of problems for us all by not giving us a complete ER for Q2.

[BlackistheBerry]

A few hours after and the effects are still lingerling. I too wonder why pre-er have to be on a friday with 25 mins left for trading plus XBBM launching this weekend? I swear this does not make any sense. what do the mgmt achieved or get out of this by doing it before XBBM and ER next week!!

Maybe there's rules of why they have to do this on a friday just before trading is about to close!! Any thoughts around this would be greatly appreciated.

Just speculating here...

Could be late in the day so that the SP is not driven too low during trading?
If this was in the morning, the SP MAY have dropped more than what it did?
Now, after this, BBM is launched, and hopefully, the SP will recover a bit, and continue to trade sideways till the ER ( maybe go up a bit with the Z30), and will not drop much at ER ?
So maybe, this softens the drop in the SP?

Also, if they have some more important information coming up next week, they may not want to club all this information together?

Also, there may be some legal requirements for announcing it, that I am totally in aware of.

[Bugmapper]

My theory is today was the best day to bury bad news (apple launch, bb10.2, xbbm , Friday of quad witching, Z30, tapering news etc.) and they left enough time for the stock to drop but not enough time for everyone to do all the math. Also, bad news for employees always on a Friday so that they can calm down on the weekend.

Posted via CB10 on a Z10 root device!

[morganplus8]

[QUOTE=_dimi_;9203067]Hi Morgan!

BlackBerry.com has the full press release. They estimate service revenue and provide the adjusted net loss. Is it correct to assume that this is the loss excluding the restructuring cost and inventory write down? Still pretty high, no? As always, thanks for the info!

-----

Preliminary Second Quarter Fiscal 2014 Results

The Company currently expects to report revenue for the second quarter of approximately $1.6 billion, of which approximately 50% is expected to be service revenue. For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones. Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognized until those devices are sold through to end customers. During the second quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company?s inventory in channel.

As a consequence of the more intense competition the Company is experiencing in its hardware business, it expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the
second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.

The current quarter will also include a pre-tax restructuring charge in the approximate amount of $72 million reflecting ongoing cost efficiency initiatives.

As previously disclosed, the Company anticipated generating an operating loss in the second quarter. The Company currently expects that its adjusted net loss, before giving effect to the inventory and restructuring provisions referred to above, will be in a range of approximately $250 million to $265 million, or $0.47 to $0.51 per diluted share. Including the inventory and restructuring provisions, the GAAP net loss is expected to be approximately $950 million to $995 million, or $1.81 to $1.90 per share. Adjusted gross margin is expected to be approximately 35-37 percent.

At the end of the second quarter, total cash, cash equivalents and investments is estimated to be approximately $2.6 billion. The Company has no debt.

The preliminary, unaudited information provided above is based on the Company?s current estimate of results from operations for the second quarter of Fiscal 2014 and remains subject to change based on the Company?s ongoing review of results, the subsequent occurrence or identification of events prior to closing of the review and any further adjustments made in connection with closing and review procedures. All figures in this release are in U.S. dollars and U.S. GAAP, except where otherwise indicated.

Posted via CB10[/QUOTE]

So there you have it, my numbers are dead on, they kept Services at an even rate or slightly higher which is a pleasant surprise and welcome because everyone and their dog believed that Services would drop to zero!! Then there is the handset sales, they included only BB 07's in that pool and left out the higher margin Z10's for Q3. I have to look at the rest because I don't see any mention of tax credits in all of this and they should be a positive $ 300 million. It's as though they are setting the company up for a huge gain to a private buyer. They are back loading all of the good news in favour of charging all of the low margin stuff now. They can't hide the Services revenue though, thank god for that. I wonder if anyone will notice how this is playing out? Thanks

[Bugmapper]

They wrote off z10s too soon IMHO. I think it's a take under.

Damn.

Posted via CB10 on a Z10 root device!

[bungaboy]

They wrote off z10s too soon IMHO. I think it's a take under.

Damn.

Posted via CB10 on a Z10 root device!

Played like a Cape Breton fiddle. . . . again.

[m1a1mg]

They wrote off z10s too soon IMHO. I think it's a take under.

Damn.

Posted via CB10 on a Z10 root device!

I'm no fan of conspiracy theories, but this whole thing stinks. What is left to think after months of corporate moves that make you scratch your head.

[plasmid_boy]

They wrote off z10s too soon IMHO. I think it's a take under.

Damn.

Posted via CB10 on a Z10 root device!

It dose smells like it, but I hope that's not the case.

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[Bugmapper]

Let's all hold hands, close our eyes, and pray.

:can't watch:

Posted via CB10 on a Z10 root device!

[silversun10]

i like it that they got the ER news out of the way. so, now the possibly positive news from the xBBM can take over next week without getting buried by the originally planned ER.

[bigbadben10]

My theory is today was the best day to bury bad news (apple launch, bb10.2, xbbm , Friday of quad witching, Z30, tapering news etc.) and they left enough time for the stock to drop but not enough time for everyone to do all the math. Also, bad news for employees always on a Friday so that they can calm down on the weekend.

Posted via CB10 on a Z10 root device!

My thoughts exactly. Get this out the way.... by ER then announce BBMx downloads in the millions etc etc.

Posted via CB10

[Kid Vibe]

i like it that they got the ER news out of the way. so, now the possibly positive news from the xBBM can take over next week without getting buried by the originally planned ER.

I'm really confused as to why the release is now, but you may have a point. As for a take under, I really hope this doesn't happen. If I was BB I would still push the enterprise market and see what firms like JP Morgan consider in the long run. Why would they throw in the towel now when they just released this mind **** report. I don't know really... Maybe TH knew all along and once his shares popped up to 12 he sold and now is throwing in the bag... Blah, I have no idearrrrrrr. Shaking my balls of steel right now, they don't feel to good.

[JLagoon]

My thoughts exactly. Get this out the way.... by ER then announce BBMx downloads in the millions etc etc.

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Let's hope that it won't take someone to ask for Heins to say the download numbers.

[cjcampbell]

JLagoon!!

I can only guess, I have never seen a company halt a stock that late in the day and not keep it halted until the close. The news is incomplete, we don't know what Services were, we can't figure out how many BB 10 phones where in the 5.9 million handset number either. Without Services, we can't see if there is bleed in Subs or not. With services we could at least guess at Subs. That's their bread and butter. Then there is guidance, Heins told us we would be negative on earnings, are we still negative after these cuts and are they enough now to have back to back profitable quarters? Then there is the interest by other parties, we don't have anything to balance this clean up with. And so why would you halt your stock and open it up again for trading with a 1/2 hour to go knowing you gave us only 60% of the ER? I can't guess why this happened but it makes me think someone went hunting for shares prior to the BBM-X launch. Just guessing here!

My guess is that with all the leaks thus week of the impending news, they finally decided to make a public and official statement before there could be more leaked over the weekend.

Posted via CB10

[silversun10]

I'm really confused as to why the release is now, but you may have a point. As for a take under, I really hope this doesn't happen. If I was BB I would still push the enterprise market and see what firms like JP Morgan consider in the long run. Why would they throw in the towel now when they just released this mind **** report. I don't know really... Maybe TH knew all along and once his shares popped up to 12 he sold and now is throwing in the bag... Blah, I have no idearrrrrrr. Shaking my balls of steel right now, they don't feel to good.

i don't even see the logic of any take under, so, sure does not make any sense to me.
i get the early release: we had tons of leaks, so they had to come clean sooner than later. and as far as the timing, it is simply standard procedure to dump bad news late on Friday's, nothing new there.

[Randeman]

Not sure what to think. I have to admit though that people familiar with the matter really were familiar with the matter.
Who 'd a thunk it?
Have to keep that in mind for next time.

Posted via CB10

[_dimi_]

Inventory write-down + restructuring cost + adjusted net loss (excluding inventory & restructuring) - GAAP net loss

I come up with a tax credit of 302-347 million. Not sure if it's correct though :-) Anyone knows if the GAAP net loss figure includes tax credits?

I desperately (!) need a bed nor am I a CFA so take it with a grain of salt :-)

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Edit: last calculated guess, 257 - 347 million :-)

[Bigbacala]

So by writing off the inventory of phones this quarter and taking the loss now, if the phones sell during the next quarter does that have the ability of adding to the revenue and perhaps ending up with a profit next quarter?

Secondly i believe that the majority of BES10 revenue will start to roll in next quarter as well.
I work for a company that has over 50,000 employees world wide. The devision I work for has about 1000 employees.
Our IT department ordered BB10 phones for testing the first day available back in February. As with many large companies there is a lot of red tape to go through before approvals happen. The test phones did not arrive until early May. Test starting date then lost some priority to other projects. I kept asking IT staff how things were going last month I was told that our internal testing was completed and they were waiting on corporate buy in and approval.
Well today of all days I heard that corporate has approved BES10 and new phones will start being distributes within 2 weeks.
Based on what I see around here i would estimate 10%-20% of employees have phones that will be on the network. All Blackberries.
Being experienced from having worked for large corporations over the years and seeing how changes sometimes come very slowly ( we are just recently been rolling out windows 7 computers) I believe that large orders of Blackberry devices and BES services will now start showing up and will be a boost to the next quarter revenue.

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[Reed Richards]

Have to thank everyone here for their thoughts, it's helping me sort through this mess.

I usually go for the simplest explanation, but I'm in over my head here. Maybe BlackBerry was legally required to do this, maybe it was a plan to get it all out now so that they have a stretch of all positive news. Like everyone else, I *really* hope this isn't tied in to making the company more attractive to buyers. It's one thing to streamline your company to make it more attractive, it's another to present the news in a way that crushes the share price so a buyer will swoop in.

One of the reasons I invested in BlackBerry was that I felt they had undervalued assets, so that even if BB10 did not catch on immediately, the company would still have value, and other means to make money. Looks like my rationale is about to put to the test! Staying long, partly out of hoping for a readjustment up, partly out of conviction of value, and partly out of irrational stubborness.

[abouthsu]

Not sure what to think. I have to admit though that people familiar with the matter really were familiar with the matter.
Who 'd a thunk it?
Have to keep that in mind for next time.

Posted via CB10

To add to that, was having dinner with my wife and she said this to me without any knowledge of investment. If you believe in the product yet the leadership seems or might be a problem, why would you invest in him as he is the one driving the ship. I went *silence*

[leafs123]

So this is where y'all went lol.

What a day! ahh.

[plasmid_boy]

So this is where y'all went lol.

What a day! ahh.

Yeah. I'm feeling better after a few glasses of Crown.

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