BlackBerry Ltd (NASDAQ:BBRY) Shares Shot on Massive, Deadly Loss

blackberry ltd (BBRY) OS

BlackBerry Ltd , shares flopped in pre-market trading on Friday morning after it revealed its earnings numbers for the three months through August 2015, a quarter the firm recorded as its second of 2016. BlackBerry lost 13 cents per share in the three months, far in excess of the 2 cents the firm lost last year.

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At time of writing shares int he Waterloo, Ontario, firm were selling for 6.50 , down 7.54 percent in this morning’s pre-market trading. BlackBerry tried to highlight the positives in Friday’s report, focusing on the double-digit growth in software licensing sales. Wall Street, and Toronto, weren’t taking the firm’s line without question.

Tracking a BlackBerry turnaround

BlackBerry Ltd , , currently lead by John Chen, is trying to show investors that it can pivot away from a failing hardware business and grow its sales in software licensing. The firm has put a lot of focus on enterprise mobility solutions in recent months, and it’s showing some traction as evidenced by the rising license revenue.

In the second quarter BlackBerry showed sales of $490M, well below the $915M the firm showed for the same three months of 2014. Analysts were looking for the firm to lose 9 cents per share this time around and report sales of $611M.

The bright spot was software and services sales. Those hit $74 million, a 19% increase over the same quarter of last year. The boost was driven by 33% growth in software licensing. The firm also showed positive free cash flow of $100M.

BlackBerry Ltd crashes once more

It’s clear from the movement on the stock market on Tuesday that traders are taking little solace in the silver linings Mr. Chen has offered. BlackBerry , shares had shed more than 35 percent of their value in from January 1 through close of market on Thursday.

With losses still building up, and after this morning’s report there appears to be no end in sight, many investors have sold out of their shares in the firm for fear that the planned growth will never arrive.

The losses in this morning’s pre-market may not carry through to market open this morning. If they do, however, BlackBerry stock will be trading at a level close to that when John Chen joined as CEO back in November 2013.

Analysts are looking for Mr. Chen to follow through on his promise to make BlackBerry a major software and security firm. While that side of the business is growing, BlackBerry needs to ensure rude financial health across the rest of its business in order to make growth a possibility.

With a renewed focus on hardware, in the form of at least one, if not two, new Android phones, it’s not clear if BlackBerry will be able to avoid losing money long enough to see its software goals come to fruition.

James E. Faucette of Morgan Stanley, in a report published ahead of BlackBerry’s earnings, said that the firm may need to start “liquidating the long-term standalone value the IP portfolio may have” if software doesn’t generate a profit in short order.

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