1. RubberChicken76's Avatar
    They referenced this in the earnings report and on the call but I'm not quite understanding what is happening here. Can someone with a knowledge of the market explain why BlackBerry had to take these charges because they couldn't recognize revenue in the region?
    06-28-13 11:11 AM
  2. just_luc's Avatar
    They referenced this in the earnings report and on the call but I'm not quite understanding what is happening here. Can someone with a knowledge of the market explain why BlackBerry had to take these charges because they couldn't recognize revenue in the region?
    you're talking about the service revenue they couldn't count from Venezuela?
    hildebrandz likes this.
    06-28-13 11:18 AM
  3. LoganSix's Avatar
    Venezuela riots Hugo Chavez death

    Devaluation of currency.
    06-28-13 11:22 AM
  4. jstirtzinger's Avatar
    They ended up getting paid with worthless currency once the conversion is done.

    Posted via CB10
    06-28-13 11:38 AM
  5. tickerguy's Avatar
    They didn't get paid as the Chavez turmoil froze their FX from there. How much of that is recoverable is open to question; it was VERY material to the loss however, being the majority of it in terms of EPS.
    06-28-13 01:05 PM
  6. RubberChicken76's Avatar
    you're talking about the service revenue they couldn't count from Venezuela?
    Yes. More specifically, why they couldn't count it.
    06-28-13 01:21 PM
  7. just_luc's Avatar
    Yes. More specifically, why they couldn't count it.
    Yea, sorry I'm as confused about that as you are. I was just clarifying your question.

    Posted via CB10
    06-28-13 02:42 PM
  8. RubberChicken76's Avatar
    This was in Bloomberg


    BlackBerry Shares Plunge After Touch-Screen Model Flops
    By Hugo Miller - Jun 29, 2013 12:01 AM ET

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    BlackBerry's 'Brutal' Results Spur Takeover Talk

    BlackBerry (BBRY)’s shares tumbled the most since 2000 after the company reported a surprise loss and weak sales of a new touch-screen model, underscoring its challenges in competing directly with the iPhone and Android devices.
    Enlarge image Blackberry Earnings

    The BlackBerry 10 is displayed during the device's launch in New York, on Jan. 30, 2013.Photographer: Scott Eells/Bloomberg
    Blackberry's Heins on Q10, Z10 Phones and Strategy
    5:26

    April 29 (Bloomberg) -- Thorsten Heins, chief executive officer of Blackberry, talks about the company's Q10 mobile device, return rates on the Z10 phone and Blackberry's market strategy. He speaks with Bloomberg's Willow Bay at the Milken Institute 2013 Global Conference in Los Angeles on Bloomberg Television's "Lunch Money. (Source: Bloomberg)
    BlackBerry's Sales Miss Slams Stock, Suppliers
    2:26

    June 28 (Bloomberg) -- Bloomberg's Dominic Chu breaks down the numbers behind BlackBerry's disappointing second-quarter results as shipments fell well below expectations. He speaks on Bloomberg Television's "In The Loop."
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    The company shipped 6.8 million smartphones last quarter, including about 2.7 million new BlackBerry 10 models -- primarily its flagship Z10 touch-screen phone. Analysts had estimated total shipments of 7.5 million, with about 3.6 million BlackBerry 10 units. The Waterloo, Ontario-based company also blamed Venezuela’s currency controls for a portion of its quarterly loss because they hurt Latin American revenue.

    BlackBerry is struggling to expand beyond keyboard phones, which are still popular among some lawyers and professionals but not as sought-after as Apple Inc. (AAPL)’s iPhone or smartphones based on Google Inc. (GOOG)’s Android. Yesterday’s stock tumble more than wiped out its gains for the year, signaling that investors may have been too optimistic about BlackBerry’s ability to wage a comeback fight against touch-screen rivals.

    “The company now is a niche player for the declining segment that clings to a physical keyboard,” said Erik Gordon, a University of Michigan business professor.

    BlackBerry shares plunged 28 percent to $10.46. It was the biggest decline since April 12, 2000, when stocks were crashing after the dot-com bubble burst. The fall more than erased a gain this year of 22 percent before yesterday.
    Quarterly Loss

    BlackBerry’s loss last quarter was 13 cents a share, excluding some items, BlackBerry said in a statement. Analysts had estimated a profit of 8 cents on average, according to data compiled by Bloomberg. It reported sales of $3.07 billion for the period, which ended June 1, falling short of the $3.37 billion predicted by analysts.

    “They missed on units, gross margin, earnings,” said Kevin Stadtler, president of Fort Worth, Texas-based Stadtler Capital Management, which owns about 45,000 BlackBerry shares. “It’s been a disappointing launch so far.”

    BlackBerry’s flagship Z10 model was first introduced in the U.K. in late January before being rolled out in the following weeks in Europe and the U.S. The Q10, which has a physical keyboard, was introduced in April in some markets, though not in the U.S. until June. The model is meant to appeal to BlackBerry loyalists who prize the company’s qwerty keypads.
    Higher Hopes

    “A full quarter of BlackBerry 10 sell-in should’ve resulted in better results,” said Mark Sue, an analyst at RBC Capital Markets who has the equivalent of a hold rating on BlackBerry shares.

    BlackBerry also faces price pressure in regions such as Latin America and South Asia, where low-cost Asian manufacturers are flooding the market with devices that run on Android.

    “BlackBerry 10 is still in the early stages of its transition,” Chief Executive Officer Thorsten Heins told analysts yesterday on a conference call. “In fact, we are only five months in to what is the launch of an entirely new mobile computing platform.”

    BlackBerry’s installed base of subscribers fell to 72 million worldwide from 76 million last quarter. That followed a drop from 79 million in the previous period.

    Because of currency controls in Venezuela, no cash was received in the quarter from that country’s services revenue, the company said. That contributed to a 6 percent decline in Latin American revenue.
    More Losses

    The situation also reduced BlackBerry’s earnings by 10 cents a share. Without that, the company would have been closer to the break-even point, meeting its previously announced projections for the quarter, BlackBerry said. Management expects another operating loss this quarter.

    Venezuela’s government has limited access to dollars with currency controls over the past decade, making it difficult for companies with foreign headquarters to repatriate cash at the official exchange rate. The country has devalued its currency five times over the past nine years, most recently when it weakened the exchange rate by 32 percent to 6.3 bolivars per dollar on Feb. 8.

    Procter & Gamble Co (PG). found itself facing as much as $275 million in aftertax charges from the February devaluation, the Cincinnati-based company said that month.

    BlackBerry Shares Plunge After Touch-Screen Model Flops - Bloomberg
    06-29-13 02:40 PM
  9. iSin's Avatar
    Im Venezuelan and let me try to explain this the best way i can, because i live in this country and i know exactly whats happening.

    Ever since Hugo Chavez was in charge he made the decision to regulate the amount of dollars you could get per year on banks because there were groups with a lot of money, usually political rivals that managed to buy all the dollars in the market or at least most of it, making them automatically into the only ones that had $ available for sale in the country and because of that a parallel market which we call here "Blackmarket" appeared, so if the government sells each dollar for 2 BsF (our currency) but ran out of them for sale, the group that bought all the dollars sells them for a higher aomount, lets say 6BsF. Notice the diferrence between prices? that led our country to an economic catastrophe regarding everything that has to do with importations paid in USD (Food, Technology, Etc).

    The government thought controling how many $ people could get per year would be the solution to this, so they decided also controling how many $ mobile carriers in this case could get because there were people in those mobile company at high charges that took advantage of the $ the goverment sells them for 2BsF, taking them to the black market and selling for 6BsF. The basic problem here in corruption..

    How i think this affected BlackBerry?

    Well, right after Chavez died the people that had control at the time decided to devaluate the currency in order to get more BsF per each oil barrel we sell (We only sell oil, gas for cars is cheaper than water in Venezuela). So if BlackBerry was used to a lower exchange rate of BsF per dollar, when we devaluated that means a high loss because now the BsF are worth even less than de USD.

    Hope someone could at least understand whats happening here, this is a unique case in the world. I think only 2 more countries regulate the $ and also, the social aspect of this whole problem might not be easy to understand for some people.
    06-29-13 03:05 PM

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