09/25/2015 08:18 EDT | Updated 09/25/2016 05:12 EDT

BlackBerry Announces 'Priv' Android Phone As Revenue Collapses

Bloomberg via Getty Images
John Chen, chief executive officer of BlackBerry Ltd., speaks on a Passport smartphone during a Bloomberg Television interview at a product announcement in Toronto, Ontario, Canada, on Wednesday, Sept. 24, 2014. The square-screened Passport is BlackBerry's first major new device slated for a global introduction since Chen set out in November to turn around the company by shifting away from the consumer market toward business and professional users. Photographer: Hannah Yoon/Bloomberg via Getty Images

WATERLOO, Ont. -- BlackBerry (TSX:BB) missed already low expectations for its second-quarter, reporting just US$490 million of revenue.

That was down 46 per cent from US$916 million in the comparable period last year and below analyst estimates of US$611 million.

On the positive side, the Waterloo-based smartphone maker did report US$51 million of net income, which was an improvement on the year-earlier net loss of US$207 million, as well as US$100 million of positive cash flow.

But on the adjusted basis that's followed by most analysts, BlackBerry had a loss of US$66 million or 13 cents per share -- deeper than the nine cents per share that had been estimated.

The company also announced plans to launch a device using the Android operating system, part of BlackBerry's plans to reposition itself in a highly competitive market dominated by devices with Android and Apple operating systems.

BlackBerry chairman John Chen said the new device is called the Priv -- emphasizing BlackBerry's core mission of protecting customer privacy.

"Priv combines the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform,'' Chen said in a statement.

He also pointed out that BlackBerry's revenue from software licensing and services was US$74 million, up 19 per cent from a year earlier.

"I am confident in our strategy and continued progress, highlighted by our fourth consecutive quarter of year-over-year double digit growth in software licensing revenue and sixth consecutive quarter of positive free cash flow,'' Chen said.

He said BlackBerry expects revenue will rise in the company's third and fourth quarters of fiscal 2016.

Analysts had set the bar low for the second quarter report.

The Waterloo, Ont.-based company has issued widespread layoff notices to its workforce this summer.

Over the past few weeks, those reductions have centred on deep cuts to its hardware development and manufacturing business as it puts a lower priority on smartphone development, according to two sources who were familiar with the cuts.

Some of those employees have been told they will lose their jobs in November, one of the sources close to the matter said.

The sources both say hundreds of additional jobs have been quietly shed over the summer, affecting offices in Ottawa and BlackBerry headquarters in Waterloo, in particular. More recent cuts have also impacted BlackBerry manufacturing facilities in Cambridge, Ont.

The company, which confirmed some job reductions earlier this summer but refused to disclose numbers, declined late Thursday to say how many jobs were part of more recent cuts.

BlackBerry said it had 6,225 full-time global employees as of Feb. 28, its most recent filing with regulators, but though those employee numbers are likely much lower after various other waves of cuts throughout its international operations this year.

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