this is what Chen said about returning to profitability.
"You know, all that combined, this will tie to our ability to become cash flow positive and profitable. And so you should be looking at it towards the end of fiscal year ’15, sometime early in fiscal year ’16 as our targeted date for that to become hopefully a positive number, but at least not a negative number."
This doesn't mean that they will bleed as badly as this quarter for all the quarters until they return to profitability. They have the cash to sustain themselves until then. They are reducing their operating expenses by 50% by Q1 Fiscal 2015 (ending May, 2014).
Foxconn provides a shield from Blackberry taking any more huge inventory losses. Yes there might be some more inventory losses but no where near the ones they have had to take. Its a joint manufacturing agreement where Foxconn gets paid for their costs and enough to make a reasonable profit. If business is really good then Foxconn gets to share in the margins. Incentive for everyone. The important part is that financial risk for BBRY is reduced and this provides BBRY a way to compete in the low cost end of the market (something they were badly needing).
Yes Chen is not promising the moon but he does feel they have a number of strengths that will give them a good shot at it and he has a strategy for moving forward.
Today was a bunch of nervous short covering and a bunch of opportunistic traders like myself. Buried in there also there is probably some early believers in the company turning the corner (too early for me though).
No doubt the likes of regular critical analysts will have their knives sharpened and will come out Monday with their updated opinions on why the sky is falling. Fortunately there is more to the market than just them.
It's better to be out wishing you were in than in wishing you were out.
"Markets can remain irrational longer than you can remain solvent". - John Maynard Keynes
