BlackBerry today posted better than expected quarterly earnings, offering signs its turnaround efforts may be beginning to gain traction.

But a larger-than-expected drop in revenue gave investors cause for concern. 

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

Excluding one-time items, quarterly profit was $20m, or four cents a share. Analysts, on average, expected a loss of four cents a share in the period, according to Thomson Reuters I/B/E/S. 

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

In a positive sign, the company said its software revenue rose 20% from a year earlier to $67m. 

The revenues are a key metric that analysts are looking at this quarter, given the company's ongoing transition to a more software-driven revenue stream, away from its more traditional hardware- and services-driven model.