BlackBerry Ltd posted better-than-expected quarterly earnings on Friday, offering signs its turnaround efforts may be beginning to gain traction, but a larger-than-expected drop in revenue worried investors.

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The stock seesawed in premarket trading, reflecting the mixed investor sentiment. The stock initially rose sharply, then fell into negative territory. It was up 4.8 percent at $9.75 at 8 a.m. EDT (1200 GMT) on Nasdaq.

Waterloo, Ontario-based BlackBerry reported net profit of $28 million, or 5 cents a share, in the fourth quarter ended February 28. That compared with a year-earlier loss of $148 million, or 28 cents a share.

Excluding one-time items, quarterly profit was $20 million, or 4 cents a share. Analysts, on average, expected a loss of 4 cents a share, according to Thomson Reuters.

Quarterly revenue, however, slid to $660 million from $793 million, and was well below Wall Street expectations of $786.4 million.

“BlackBerry continues to do a good job controlling operating expenses and eliminating its cash burn during its business transition, but the total revenue was still a big miss and we still have concerns about the demand side of the equation,” said Morningstar analyst Brian Colello.

Software revenue rose 20 percent from a year earlier to $67 million. Analysts view this an important metric, given the ongoing transition to a more software-driven revenue stream, from its more traditional hardware- and services-driven model.

“It’s a good start, they are looking for a more meaningful ramp in the middle of the fiscal 2016, but certainly it’s a good start,” Colello said. “It’s an early good sign.”

The company reported positive cash flow of $76 million in the quarter, compared with a cash burn of $784 million a year ago. Its cash position rose to $3.27 billion in the fourth quarter, from $3.1 billion in the third quarter.

© Thomson Reuters 2015