Barnes & Noble profits as Nook losses narrow
Net income was 86 cents a share, compared with a loss of $3.68 million, or 14 cents, a year earlier, the New York-based company said Wednesday. Sales fell 10 percent to $2 billion. The average of four analysts’ estimates compiled by Bloomberg was $2.01 billion.
Chief Executive Officer Mike Huseby is cutting spending in the Nook division, including job cuts announced earlier this month, after lowering prices for the tablets to clear inventory during the holiday season. Last year’s results also included charges for excess inventory, discounting and returns from retail partners as Nook demand plummeted while other units remain profitable.
“The company looks like it’s back on track,” John Tinker, an analyst at Maxim Group in New York, said Wednesday in a telephone interview. “The Nook is now coming under control.”
The Nook unit’s loss before interest, taxes, depreciation and amortization narrowed to $61.8 million from $190.4 million a year earlier. Earnings on that basis in the retail segment fell 7.5 percent to $199.6 million. Staffing is down about 26 percent this fiscal year, to about 500 people, Huseby said on the conference call Wednesday.
Barnes & Noble said it isn’t considering a $22-a-share takeover proposal New York-based G Asset Management made to the company last week. The company hasn’t held discussions with G Asset President Michael Glickstein, said Brad Feuer, the bookseller’s general counsel.
“There’s really nothing behind him or his proposal,” Feuer said Wednesday in a telephone interview. “The company and the board decided there’s nothing to engage with because it’s not a real proposal.”
Huseby said Wednesday on a conference call that the board would consider share buybacks this year and also is in discussions about whether to separate its digital or college businesses from its retail stores.
“We’d like to have some more certainty around those discussions before we start using our cash,” he said.
The company said it plans to introduce a new color Nook tablet early in its next fiscal year and is in discussions with potential manufacturing partners.
Barnes & Noble also seeks to expand the sale of digital content here and overseas, Huseby said. “That’s our focus at Nook, selling content revenue,” he said today in a telephone interview.
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