BlackBerry shares surge 15.5% on Foxconn deal

Brett Molina | news

Shares of BlackBerry surged 15.5% Friday to close at $7.22 after the company announced a five-year partnership with Taiwanese manufacturer Foxconn.

The primary focus of the deal will be creating a smartphone for Indonesia and "other fast-growing markets." BlackBerry CEO John Chen says the Foxconn device will likely launch in March or April. Foxconn is best known for its manufacturing work with Apple on iPhone.

Under the deal, Foxconn will manufacture phones at facilities in Indonesia and Mexico.

The deal was announced along with third-quarter earnings that show another round of losses, as the company navigates a major transition in its business.

BlackBerry reported $1.2 billion in revenue in its third quarter, down from $2.7 billion the year before. BlackBerry reported a loss of $4.4 billion, while its adjusted losses from continuing operations hit $354 million, or 67 cents per share.

Analysts polled by FactSet, on average, expect a loss of 43 cents per share on revenue of $1.66 billion.

The new round of losses arrives as BlackBerry transitions to new leadership. This is the first quarterly report under Chen, who took over last month for Thorsten Heins. BlackBerry's management shake-up follows a decision to back off a possible sale of the company in favor of a $1 billion investment from Fairfax Financial Holdings.

"We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year," Chen said in a statement.

BlackBerry had pinned hopes of a rebound on its lineup of BlackBerry 10 smartphones, but consumers failed to show interest in a market dominated by Apple's iPhone and Google's army of Android devices. Earlier this year, Microsoft's Windows platform vaulted past BlackBerry as the No. 3 mobile operating system.

For the quarter, BlackBerry sold 4.3 million smartphones, but the majority were older devices running the BlackBerry 7 operating system.

Although BlackBerry plans to continue working on hardware, the company is shifting more focus to enterprise services and messaging, including its BlackBerry Messenger service.

"The most immediate challenge for the company is how to transition the devices operations to a more profitable business model," Chen said.

Contributing: The Associated Press

Follow Brett Molina on Twitter: @bam923.