BlackBerry Stock Buoyed by Foxconn Deal
Will a new partnership help turn BlackBerry’s (NASDAQ:BBRY) fortunes around? The struggling Canadian smartphone maker recently announced a five-year deal with Foxconn, a Taiwan-based manufacturer of electronics components that is perhaps best known as one of Apple’s (NASDAQ:AAPL) primary suppliers.
BlackBerry made the announcement after it reported a fiscal third-quarter loss of $4.4 billion, or $8.37 per share. Excluding the writedown on unsold inventory and asset impairment charges, the loss was $354 million. Meanwhile, revenue for the quarter declined approximately 56 percent from the year-ago quarter — from $2.7 billion to $1.2 billion.
Despite the loss, BlackBerry’s shares closed up over 15 percent on Friday at $7.22, due to investors’ positive reaction to the Foxconn deal. Under the deal, Foxconn will jointly develop and manufacture some of BlackBerry’s new devices and will take over inventory management. By handing off inventory management to Foxconn, BlackBerry will reduce its exposure to future inventory writedowns. According to BlackBerry, the partnership will initially focus on developing a low-cost smartphone for Indonesia, Mexico, and other emerging markets.