Barnes & Noble reported second-quarter losses ending October 29th. While the losses were mostly unexpected, the offsets from the Nook products managed to stabilise things on the most part.
Total sales decreased by 0.6 percent compared to the previous year from $1.90 billion to $1.89 billion. Analysts had expected $1.98 billion, but failed to reach due to declining physical book sales and the rise of college textbook rentals.
The bookstore giant posted a total net loss of $6.6 million for the quarter, or $0.17 per share, compared to a loss of $12.6 million on the year before. Though Wall Street expected better results, the company is in the midst of troubling tablet competition, so appear fair.
But sales of the Nook Tablet have been positive and reflected in the earnings. The $249 device was introduced to the market this month, and is said to be the fastest selling Nook product in history.
Barnes & Noble said that the consolidated Nook business, including digital sales, the devices hardware and related content increased 85 percent in the second quarter to $220 million.
Retail sales decreased by 1 percent from $931 million to $918 million, with book sales declining also. But this was offset by the increase in Nook sales, and positively affected by the liquidation of the remaining handful of Borders stores.
Barnes & Noble continues to invest in e-books and its tablets, along with its traditional book-selling arm. But it faces increasingly tough competition from online retailers, which forced rival Borders to liquidate earlier this year.
College sales declined by 4 percent from $792 million to $768 million, due to a shift from selling new and previously used textbooks and reference books to lower prices; fighting against the rising academic rental business.
But even before interest, taxes, and depreciation, earnings grew 21 percent over the previous year by $10 million to $56 million.
Microsoft has not been playing kind with Barnes & Nobles efforts to enter the Android market. But the bookstore giant recently added David Boies to its legal team to battle the software behemoth against the patent dispute, which could lead the two companies down a bitter Samsung vs. Apple route.
Across the technology spectrum, the newly updated Nook Simple Touch continues to gain strength from reviewers and experts alike.
"The launch of Nook Tablet, combined with the product enhancements to Nook Color and $99 Nook Simple Touch, represents the highest-quality portfolio of digital reading products on the market at incredible values", William Lynch, Barnes & Noble's chief executive said.
"We expect to sell millions of devices during our third quarter, adding to the millions of current Nook customers. This growing base of customers buying digital content from Barnes & Noble will continue to position us as one of the fastest growing companies in this exploding digital content market, and we project this will generate significant returns on our investments for years to come".
- Barnes & Noble Q1 loss narrows; Nook revenue up 140 percent
- New Nook Tablet has a shot against Kindle Fire
- Google and Barnes & Noble get serious about Android patent lawsuits
- Barnes & Noble adds David Boies to its legal team to fight Microsoft over patents
- Barnes & Noble unveils Nook Color for $249
- Photos: Amazon Kindle Fire vs. Barnes & Noble Nook Tablet