BlackBerry shares fell as much as 4.65% to $7.80 on Thursday ahead of the company’s third-quarter results. The Canadian company is scheduled to report its Q3 results on Friday, December 18 at 8 a.m. EST. The Wall Street is somewhat bearish on the company going into earnings season. Analysts on average expect BlackBerry’s Q3 revenue to decline 38.30% YoY to $489 million. The Waterloo-based company is expected to post a loss of 14 cents a share compared to a profit of 1 cent per share in the same quarter a year ago.

BlackBerry Ltd (BBRY) Q3 Earnings Preview: What Analysts Expect

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However, a nearly 40% decline in revenue doesn’t look bad when compared to the August quarter revenue of $490 million. BMO Capital Markets analyst Tim Long said in a research note that he expected BlackBerry’s November quarter revenue to come in at $482 million with a loss of 12 cents per share. Tim Long expects gross margins of 43.8% compared to the Street estimate of 42%.

BMO Capital Markets believes that software revenue is still the most important metric. The research firm projects Q3 software revenues of $106 million and full-year revenue of $480 million, which is well within reach of the company’s $500 million target. What concerns BMO is that it took BlackBerry the acquisition of Good Technologies and two large IPR deals to get there.

What impact Priv had on BlackBerry’s smartphone sales

Good Technologies is expected to contribute $35 million to BlackBerry’s February quarter revenues. BMO Capital Markets has a Market Perform rating on the stock with $7 price objective. Tim Long expects BlackBerry to have sold 800,000 units of its smartphones during November quarter. However, Raymond James and RBC Capital Markets anticipate BlackBerry to recognize revenues on 900,000 handsets in Q3.

Investors will focus on the impact of the company’s latest Android-powered Priv on its smartphone sales. Launched in November, Priv combines the best of BlackBerry with the best of Android. The device sold out at Wal-Mart when it went on sale. The Canadian company has said that it would exit the smartphone market if it couldn’t make money selling smartphones.