As part of its restructuring program, Canadian handset manufacturer BlackBerry Limited (BBRY - Free Report) reached a deal to vend most of its real estate holdings in Canada. However, the company did not disclose any details of the deal.
As per the agreement, BlackBerry will sell over 3 million square feet of properties and will lease back a portion of the assets sold. In Jan 2014, BlackBerry announced its objective to sell the holdings in a bid to strengthen its balance sheet.
Recently, BlackBerry sold its U.S. headquarters in Irving, TX, to Canadian real estate developer, Brookfield Property Group. In 2013, the company announced its intent to lay off around 40% of its employees and halve its operating costs by May 2014.
BlackBerry is facing severe headwinds such as intensifying competitive landscape, stagnant product portfolio and unfavourable product mix. The company is also facing stiff competition from Apple Inc.’s (AAPL - Free Report) iPhone and Google Inc.’s Android. Thus, to counter such negatives, BlackBerry is gradually shifting focus from its handset business to enterprise services.
In the third quarter of fiscal 2014, BlackBerry sold a nominal 4.3 million smartphones as against Samsung and Apple’s 83 million and 50 million smartphones, respectively. Quarterly operating loss of $5,025 million compared unfavorably with an operating loss of just $230 million in the year-ago quarter. Writing down of long-lived assets, valued nearly $2.74 billion, mainly led to the dismal performance. The company is scheduled to report fourth quarter fiscal 2014 results before the opening bell on March 28, 2014.
BlackBerry currently has a Zacks Rank #3 (Hold). SK Telecom Co. Ltd. (SKM - Free Report) , with a Zacks Rank #1 (Strong Buy), is a better-ranked stock in the wireless industry that is worth considering.