Net Loss Narrows Sharply, But Revenue Falls Short

BlackBerry Ltd. on Friday showed its cost-cutting continues to pay off, but Chief Executive John Chen ’s record as a turnaround expert remains on the line as the smartphone maker’s quarterly revenue fell well short of expectations.

Mr. Chen assumed the top job at BlackBerry a little more than a year ago, after reviving the fortunes of software maker Sybase Inc. and selling the California company to SAP SE in 2010 for $5.8 billion.

Mr. Chen is aiming for similar success at BlackBerry, first by returning the smartphone maker to profitability by cutting costs and outsourcing device manufacturing, and then by reigniting sales with mobile-security software and services and new devices.

Results for the quarter ended Nov. 29 suggest the first part of that strategy is working. BlackBerry’s loss narrowed sharply from the year-earlier quarter, and the company generated its first operating profit in nearly two years.

But a 34% drop in revenue showed that winning new business remains a challenge.

BlackBerry reported a third-quarter loss of $148 million, or 28 cents a share, compared with a year-earlier loss of $4.4 billion, or $8.37 a share, that included sizable charges for an ill-fated smartphone launch. The company earned a penny a share on an adjusted basis, better than the loss of five cents that analysts were expecting, according to a Thomson Reuters poll. But revenue came in at $793 million, while Wall Street had projected about $932 million.

—Ben Dummett

Idemitsu Kosan
Japan Oil Refiner Is in Talks To Acquire Showa Shell

Japan’s second-biggest oil refiner and distributor, Idemitsu Kosan Co. , says it is in talks to buy industry peer Showa Shell Sekiyu K.K. as falling domestic oil demand pinches the margins of wholesalers.

Oil-refining and wholesale businesses in Japan have been struggling in recent years because oil consumption has fallen on the back of declining population and increased use of energy-efficient vehicles. The Japanese government has called for oil refiners to reduce supply capacity and consolidate businesses.

Idemitsu Kosan and Showa Shell would together make up about 30% of the domestic gasoline market, which is just short of the 34% share held by JX Nippon Oil & Energy Corp., a unit of JX Holdings Inc.

The market capitalization of Showa Shell—No. 5 in the industry by sales—was about ¥380 billion (US$3.2 billion) as of Friday.

The Nikkei business daily reported Saturday—without citing sources—that Idemitsu Kosan is in final-stage talks to buy Showa Shell for an estimated ¥500 billion.

An Idemitsu spokeswoman said the company is in talks with Showa Shell and buying out the firm is one option. However, she said a buyout isn’t the only option under consideration, and that Showa Shell isn’t necessarily the only target as the company considers integration of its refining business.

A Showa Shell spokesman declined to comment on the Nikkei report.

—Kosaku Narioka and Mari Iwata