BlackBerry is set to post earnings this Friday, March 28 before the opening bell, and according to RBC Capital Markets’ Mark Sue, this could be a “rebuilding point” for the company and its stock. Sue expencts the Canadian company to sell 1.3 million smartphones units.

BlackBerry Ltd Earnings Could Prove 'Rebuilding Point': Analyst

Optimistic going forward

Sue expects the company to report a big miss with $661 million in revenue for the three months ended in February, below the consensus estimate of $804 million. According to Sue, BlackBerry will post a loss of 7 cent per share, more than the expected 3 cent loss, because lower revenue will make it hard to cover operating expenses of around $390 million per quarter.

For the coming quarters, Sue expects revenue to increase every time with around $729.2 million in the May quarter, $730.73 million in August, $274 million in November and $739 million in the year-end February quarter. Further, the analyst expects the company to reach break-even by the February quarter of next year.

BlackBerry turning into a software company

Sue does not expect BlackBerry to earn any hardware profits this year but is optimistic going forward. The BlackBerry Classic had a modest start but is expected to leave a limited impression in the quarter, considering the fact that the handset was released midway through. “With devices now GM positive, 8M-10M units are needed to have scale for profitability. We’re expecting 7.6M BB10 units in FY16,” said Sue.

Sue notes that they are looking for solid indications that BlackBerry will meet its $500 million software revenue target for the fiscal year 2016. BES 12 billings growth will be critical, and so it will be about converting EZ Pass transaction beta/legacy customers to BES 12. Also the Canadian smartphone maker must be able to win back some die-hard enterprise customers. BlackBerry has entered into a deal with Samsung, IBM and others to leverage its security expertise. “Subscription billings growth may have to be meaningfully higher with subscription revenues recognized ratably,” the analyst said, adding that QNX contribution is expected to be more or less near ~ $100M.

On Monday, BlackBerry shares closed up 0.11% at $9.52, while year to date, the stock is down by over 13%.