Shares of Blackberry took a dive Friday morning after the struggling smartphone and software company reported a larger-than-anticipated drop in its fourth quarter revenue.
Blackberry reported revenue of $464 million in the fourth quarter, down from $660 million the year before and $548 million the previous quarter. The figure was around $99 million short of analyst estimates, according to Thomson Reuters.
Quarterly revenue for all of the company’s segments – including software and services, hardware, and service access fees – was down more than $20 million in each category.
As of 9:56 a.m. ET, Blackberry shares were down nearly 8 percent on the news.
Blackberry CEO John Chen said one particular sticking point for Blackberry this quarter was its hardware business, which posted a $30 million drop in revenue sequentially and a $90 million dip from the same quarter last year. Chen said device volume for the quarter was “below expectations.”
According to Chen, part of the problem was a delay in contract negotiations for its Android-based PRIV smartphone with major wireless carriers, including Verizon. The outcome, Chen said, is the results from the recent Verizon launch have been pushed out of the quarter.
Despite the disappointment, Chen said Blackberry still has faith in the PRIV.
“We believe this market opportunity, while it may be small today, will continue to develop and open up and we are leveraging this through increased channel coverage,” Chen said.
To date, Chen said the PRIV has been launched in 34 countries with deployments in 6 more countries through 14 additional carriers in the works. On the heels of the PRIV’s recent launch in Japan, Chen said the company is planning to launch the device in Mexico next week.
Chen also noted Blackberry is planning to release its Android Marshmallow update in late April or early May.
But it wasn’t all doom and gloom in the Blackberry report.
Chen said the company has been successful in growing its software business, which has nearly doubled its revenue year-over-year for both the quarter and the full year.
During Friday’s call, Chen said Blackberry’s goals remain the same – that is, the company will continue efforts to grow its software business faster than the market, get towards a profitable device business, and generate positive cash flow.