Blackberry Reports Negative 24% Gross Margin

By now everyone, and certainly Fairfax Financial which better have taken advantage of its faux-LBO "news" to dump its entire stake by now, knew that Blackberry's results would be abysmal so we won't spend time on that. However, as part of the just released earning report, there was one number that caught our attention: the company's gross margin. Which was -23.8%. That a minus sign.

And now we have seen almost everything that happens when reality and myth collide violently and and epic repricing (much to the chagrin of the momo chasing monkeys) takes place.

Joking aside, for those curious why the margin was negative, the reason is that BBRY basically charged off it entire brand new phone, the Z10, through some wierd combination of sales and COGS:

During the second quarter of fiscal 2014, the Company reported a GAAP gross margin of ($374) million or (24%) of revenue. Excluding the impact the Z10 Inventory Charge and CORE charges included in cost of sales, the adjusted gross margin was $570 million, or 36%.

Yes, well, if you exclude all costs and expenses, net income is indeed revenue.


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