Blackberry (BBRY) releases its third-quarter earnings this Friday, capping off what has been a rough calendar year for the company and BBRY stock holders.

In early 2013, BlackBerry underwent one of the most radical transformations in its history, launching the new BlackBerry 10 operating system. BlackBerry 10 was hailed as the future of BBRY, and the company’s first real attempt at competing with Apple’s (AAPL) iPhone and Google’s (GOOG) Android devices.

Well … it wasn’t much of a comeback. The new touchscreen phones received generally good reviews, but sales came in far lower than expected.

And after a great start to the year, BBRY stock began moving lower as well. Since a January peak, shares of BlackBerry stock have lost about two-thirds of their value as the company’s prospects withered. Heck, BlackBerry even put itself up for sale … but then opted to go it alone when Prem Watsa’s far-too-generous offer fell through. (See “BlackBerry Makes Even Investing’s Greats Look Foolish.”)

So, what should we expect from BlackBerry earnings … and what might it mean for BBRY stock? Let’s take a look.

What to Expect from BlackBerry Earnings

I should start by saying that expectations are modest. The problems at BBRY are not exactly news to anyone; handset sales are in free-fall, and the loss of market share is eroding the company’s lucrative subscriber base. The consensus estimate for BlackBerry earnings is a loss of 42 cents per share … on a $6 stock.

About the only positive thing BBRY stock fans can really say about these estimates is that they are slightly better than last quarter’s 47-cent loss. Last quarter, sales cratered by 45% … and the comps from the year before weren’t particularly great to begin with.

So what gives? Why the collapse in Blackberry earnings?

Two words: vicious cycle. Would-be customers — and particularly BlackBerry’s critical enterprise customers — are reluctant to make a major new purchase or start a new service contract if they fear that BBRY won’t still be in business to honor it. This reluctance creates a circular, self-fulfilling prophecy of sorts, in which a loss of confidence creates the very event that was feared. And naturally, Blackberry’s failed attempt at selling itself undermined whatever little confidence was left in the company.

With so much negativity in the consensus forecast, could BlackBerry earnings end up surprising to the upside?

Of course. BBRY could pull a rabbit out of a hat and post better-than-expected earnings. We could even see a short covering rally. But I wouldn’texpect a durable turnaround any time soon.

Is There Any Value at All in BBRY Stock?

That’s not to say that there isn’t any value in BlackBerry stock. Though it has been a bomb in smartphones, the QNX operating system — on which Blackberry 10 was built — has had great success in other arenas. About 60% of all car “infotainment” systems run on QNX.

But is this enough to save a foundering smartphone business? Absolutely not. But it’s something that will likely attract bidders when the company is eventually broken up and sold for spare parts.  Likewise, BBM — BlackBerry’s messaging system that was once the envy of the mobile world — has had early success as a cross-platform option. By one recent poll, more customers were downloading BBM than rival Whatsapp in some markets.

And considering its priced at just 0.36 times book value, it is almost tempting to buy BBRY as an asset play.

Still, I wouldn’t recommend it. Management still has a lot of value left to destroy, and in the event of a messy liquidation your BlackBerry stock would likely end up being worthless.

If you are bound and determined to own a piece of BBRY, I would recommend going its bonds rather than its stock. Bondholders take priority in the event of liquidation … an event that seems more likely with every passing day.

Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long O, ARCP and WMT. Click here to receive his FREE weekly e-letter covering market insights, global trends, and the best stocks and ETFs to profit from today’s exciting megatrends.