BIG QUARTERLY LOSS FOR BLACKBERRY BUT STOCK SURGES 16 %

Dec 20, 2013

By Michael Kramer

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Traders were focussing on BlackBerry today and even though the company posted a quarterly loss of $4.4 billion, shares were up considerably with investors giving new c-e-o John Chen a vote of confidence.

BlackBerry shares jumped 16 per cent to close at $7.74 , with the rally partly fuelled by a five-year manufacturing partnership with Chinese manufacturer Foxconn.

The company will begin making most of Blackberry’s smartphones, starting with a new model for the Indonesian market in the new year, and assume much of the financial risks if they sell poorly. It will drive down manufacturing costs of the phones and enable Blackberry to reduce its fixed costs even further.

Other bright lights:

The company had $3.2-billion in cash at the end of the quarter, thanks in part to a $1-billion recapitalization last month and the receipt of an income tax refund. BlackBerry also revealed it had signed up 40 million new users of its popular BlackBerry Messenger service since launching versions for Android and Apple smartphones this fall.

meanwhile-

The University of Waterloo says it has purchased five buildings and land from BlackBerry for $41 million.

The university will take over three of the buildings as soon as the deal closes on February 14th – while the remaining two buildings will be leased to the smartphone maker for up to five years.

The purchase adds an additional 300,000 square feet and more than 1,000 parking spaces to the university’s holdings.

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