Barnes & Noble: Will the Nook alter the profit equation?

Barnes & Noble on Tuesday reports its fiscal fourth quarter earnings and the bookseller is expected to report a hefty loss as it continues to invest in its Nook e-book readers.

The company on Tuesday is expected to report a fourth quarter net loss of $50.27 million, or 91 cents a share on revenue of $1.39 billion. For the year Barnes & Noble will turn a loss of $1.19 a share.

Some analysts expect that Barnes & Noble will report even larger losses, but are hopeful about the company's future. The fourth quarter will reveal some data about initial sales of its new Nook, a paperback sized gadget. For instance, Stifel Nicolaus analyst David Schick expects Barnes & Noble to report a loss of $1.09 a share in the fourth quarter, but "results could be better if nook’s impact is turning the corner with less investment and more profits per device and content sold."

Indeed, the Nook's play---as is the case with all e-readers---isn't the initial hardware sales, but the revenue generated by e-book sales. Barnes & Noble should be to the point where it has enough Nooks---color tablets, paperback sized and traditional---where it should be generating some high-margin e-book sales.

Amid all the talk of same store sales and takeover bids from the likes of Liberty Media, the Nook and e-book halo, will be the biggest question. If Barnes & Noble can show more e-book traction, the $1 billion bid from Liberty Media may look undervalued.

Related:

Hands-on review: All-new B&N Nook e-book reader (photos)

• Barnes & Noble intros pocket-sized Nook with two-month battery life
• Why Kindle has already won the ebook war
• Beyond simple rooting: Turning the Nook Color into a complete tablet
• Gallery: Turning the Nook Color into a complete tablet
• John Malone’s Liberty Media bid for Barnes & Noble was a smart move