BlackBerry reported a much smaller-than-expected quarterly loss on Friday, sending its shares on a brief rally even as its smartphone sales continued to slide.
The company said its net loss was $423 million, or 80 cents a share, for the fourth quarter ended March 1. That compared with a year-earlier profit of $98 million, or 19 cents a share.
Revenue fell to $976 million from $2.68 billion. Analysts on average had been expecting $1.11 billion, according to Thomson Reuters I/B/E/S.
Excluding restructuring charges and other one-time items, the company reported a loss of 8 cents a share. The analysts' average estimate was 55 cents.
The company said it had recognized hardware revenue on about 1.3 million BlackBerry smartphones during the fourth quarter, compared with about 1.9 million devices in the previous period.
It also said about 3.4 million devices were sold through to end customers, and this included shipments made and recognized before the fourth quarter. The company said 68 percent of these devices were BlackBerry 7s, indicating that traction around its new line of BlackBerry 10 phones remains weak.
Morningstar analyst Brian Colello said operating expense reductions were encouraging and that he thought the company could get to break-even by the end of 2015 with further cost-cutting.
"The big question still remains what BlackBerry can do on the demand side," he said. "A lot of their moves have been supply related and internal, but we're still looking for strong signs that demand is improving."
BlackBerry devices have lost ground to Apple Inc's iPhone and smartphones powered by Google Inc's Android operating system. As it tries to engineer a turnaround, the company is focusing on its services arm, which secures mobile devices on internal networks of big clients.
Under new Chief Executive John Chen, the Waterloo, Ontario-based company is also putting the emphasis back on its once hugely successful keyboard devices.
Chen told Reuters that BlackBerry was designing three new keyboard-centric devices and would probably introduce them in the next 18 months.
Shares of BlackBerry, whose global smartphone market share was below 1 percent at the end of 2013, soared nearly 7 percent before the bell before falling back in midday trading. (Click here for the latest price.)
—By Reuters. CNBC contributed to this report.