America’s largest book retailer, Barnes & Noble Inc. (BKS) reported its third quarter earnings yesterday (2/22/11). It announced quarterly EPS of $1.00, short of Bloomberg’s reported consensus of $1.13. The company also announced that it would suspend its $0.25 quarterly dividend payment. The Wall Street Journal reports:
The nation’s largest bookstore chain as measured by revenue reported a 25% decline profit over the holiday quarter and cancelled its quarterly dividend to free up $60 million for its digital strategies and other potential opportunities.
Barnes & Noble has staked much of its future on its Nook e-reader line, which goes toe-to-toe with Amazon’s Kindle and Apple’s iPad, among other devices. Electronic books are the fastest growing segment of the publishing business today.
Additionally, in light of the uncertainty caused by the bankruptcy of its major retail competitor, Borders Group, BKS declined to issue guidance for the remainder of fiscal 2011. The combined impact of these announcements sent BKS down 14.35% during regular trading to $15.94, with a slight recovery to $16.20 in after-hours trading. (Yahoo Finance)
Some observers noted the problems with BKS earlier, including Robert Weinstein at Seeking Alpha who wrote “Barnes & Noble: Has This Story Stock Ended?” on January 18th, 2011.
As of end of day 2/22/11, no Covestor model portfolios hold BKS.
Sources:
“Barnes & Noble Third Quarter Results” Press release, 2/22/2011 http://bit.ly/fLeHdv
“Barnes & Noble Sinks Most Since June After Halting Dividend to Save Cash” Matt Townsend, Bloomberg 2/22/2011 http://bloom.bg/eDOA8G
“Barnes & Noble Profit Slides” Jeffrey Trachtenberg, Wall Street Journal 2/23/2011 http://online.wsj.com/article/SB10001424052748703529004576160151103514740.html
