Barnes & Noble's Nook business falls under the bus, revenue drops by 32 percent

Summary:The bookseller's tablet division continues to see steep declines after it took a massive revenue hit during its fiscal second quarter.

Image: CNET

Barnes & Noble's Nook business is not looking so healthy. 

For the company's fiscal second quarter, the online and brick-and-mortar book retail giant saw its Nook tablet and digital content division suffer a massive revenue drop in the three-month period, ended October 26. 

The Nook business generated $108.7 million in revenue — a decline of almost one-third, or 32 percent, on the same quarter a year prior. The company said the reason was down to "lower average selling prices and lower device unit sales." 

Digital content sales declined by 21 percent during the quarter. 

Besides the division's financial ding, Barnes & Noble is looking otherwise not so bad. 

The firm's quarterly revenue dropped by 8 percent across the board, but its net profit jumped to $13.2 million from just $501,000 on the same quarter a year earlier. The massive spike in profit is attributable to the company cutting costs to reduce its falling revenue. The company's college and retail units generated more than $120 million in earnings alone. 

Last year, Microsoft invested $300 million in a 17.6 percent stake in Barnes & Noble's tablet business following a long and lengthy patent dispute. Under the agreement, a new subsidiary was created that would see a Nook e-reading app developed for Windows 8

This week, the app will be expanded to Windows 8.1 in additional countries, including the U.K. and wider Europe.

Topics: Tablets


Zack Whittaker is a writer-editor for ZDNet, and sister sites CNET and CBS News. He is based in the New York newsroom. His PGP key is: EB6CEEA5.

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