09/26/2014 04:00 EDT | Updated 11/26/2014 05:59 EST

BlackBerry Sales, Earnings Just Keep Getting Worse

WATERLOO, Ont. — BlackBerry Ltd. (TSX:BB) isn't out of the woods yet.

The smartphone maker delivered a round of financial results Friday that showed some improvements, but further challenges to overcome.

The Waterloo, Ont.-based company, which keeps its books in U.S. dollars, lost US$207 million, or 39 cents per share, in its latest quarter as it came in ahead of analyst's expectations on the bottom line, but fell short on revenue.

On a per share basis, the loss amounted to 39 cents compared with a loss of $965 million or $1.84 per share a year earlier.

Sales in what was the company's second quarter dropped to $916 million, coming in short of analyst estimates of $958.2 million, and below the $1.57 billion reported a year ago.

"We are definitely in the first half of what I refer to as the eight quarters recovery,'' chief executive John Chen said on a conference call.

"From a revenue standpoint, we might not be at the lowest point, but we are near the bottoming out.''

The company's adjusted loss, which excluded a restructuring charge and an adjustment related to its debentures, amounted to two cents per share.

Analysts on average had expected loss of 16 cents, according to a survey by Thomson Reuters.

Over the past year, BlackBerry has been squeezed from all angles by Chen, who stepped into the leadership role with the goal of creating a leaner and profitable operation.

So far, he has made significant progress and has stuck to a goal of making the company breakeven on cash flow by the end of fiscal 2015.

But he also has to contend with a longtime BlackBerry customer base in the corporate world that has migrated over to competitors like Apple's iPhone and the Samsung Galaxy models.

On a regional basis, revenue declined in every key market for the company with the exception of North America, where sales of older BlackBerry devices helped buoy the results compared with the first quarter, the company said.

Across the world, BlackBerry booked revenue on 2.1 million smartphone sales in the period, down from the 2.6 million devices sold in the first quarter.

On the upside, the company also boosted the cash in its coffers by $11 million to $3.1 billion.

Earlier this week, BlackBerry launched the Passport, a large-screen version of its smartphones that's aimed at corporate customers. More than 200,000 Passports have been ordered since it was released on Wednesday, the company said.

Behind the scenes BlackBerry has been undergoing a fundamental change in how it does business.

In the second quarter, the company formed BlackBerry Technology Solutions, a division focused on monetizing the assets of its patent portfolio and technology developed by QNX, which develops software technology for the automotive industry.

BlackBerry is also pushing a variety of subscription-based security services. A more secure version of its BlackBerry Messenger service is already being sold to corporate customers. Additional features like money transfer and a virtual conference service called BBM Meetings will be incorporated for an additional cost.

"We have a pretty strong plan in attacking the enterprise space for monetizing these features,'' Chen said.

The company is also reworking its smartphone offerings to phase out the longtime BlackBerry Bold model that has helped sustain sales during its most troubled days, while it will introduce the BlackBerry Classic later this year, a new take on its popular older phones.

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