BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) is set to report its quarterly earnings on Friday at 8:00 am EST shortly before the market opens.

Shares of the beleaguered smartphone maker have been on fire recently, rising more than 10% over its last five trading sessions. The company has been buoyed by the news that Wal-Mart is putting its new flagship Priv device in its stores, which should help sales of BlackBerry’s first smartphone running on the Android operating system. During the same time, the overall stock market has been flat.

Will BlackBerry shares be able to continue this momentum when earnings results come out? Let’s take a closer look.

Analyst expectations

Analysts are somewhat bearish on BlackBerry coming into earnings season, collectively predicting the company will post a loss of $0.15 per share for the quarter. This compares to last year’s surprise showing of profitability when it posted a penny per share profit.

Revenue is also expected to take a huge hit, at least compared with last year. Sales are expected to fall nearly 40% to US$487.92 million. It posted nearly US$800 million in sales during the comparable quarter last year.

But it doesn’t look quite as bad when comparing it with the company’s most recent quarter. In the second quarter–which ended on August 29–BlackBerry posted revenue of US$490 million. The company lost $0.24 per share during the quarter, but it did post a US$51 million profit before a dilution adjustment.

How it could beat analyst expectations

Two important factors to BlackBerry’s quarter are the Priv and software sales.

Let’s start with the Priv, BlackBerry’s latest effort to stop the bleeding from its hemorrhaging device business. This quarter will only include three weeks of Priv sales, which should be enough time for the company to at least detect sales trends.

The way I see it is if the company fails to mention Priv sales or even lightly glosses over how the device is doing, investors should take it as a bearish sign going in to the all-important Christmas season.

Remember, BlackBerry is only selling approximately 800,000 devices per quarter these days. Even if Priv sales are relatively weak, it could still boost the top line. Even a modest success in Priv sales could send shares higher.

The other thing investors have to pay attention to is BlackBerry’s software division. I’m a firm believer that BlackBerry’s next great opportunity is in software, not smartphones. It appears that CEO John Chen agrees with me, since the company has poured more than US$500 million into software acquisitions in 2015 alone.

The big one was acquiring Good Technology, a deal which just closed at the beginning of November. Again, a month of results from its newest prize isn’t likely to tell investors a whole lot, but there will likely be hints in the quarterly results.

Will BlackBerry beat?

To be honest, I have no idea. Predicting quarterly earnings is tough.

The company has missed on its last two quarters according to the TSX website. But before that it beat expectations for five consecutive quarters.

I think the company will report handset sales that are slightly lower than the market expects, further cementing the company’s inevitable move away from the smartphone space. If this happens, the stock will likely go lower on the news.

For long-term investors who still like BlackBerry’s patent trove, its pile of cash, and the potential for its software business, this could be a good time to pick up shares on the cheap.

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Fool contributor Nelson Smith owns shares of BlackBerry.