Market Overview

Barnes & Noble, Inc. (NYSE:BKS) 3Q below Estimates; Dividend Suspended by SGW


(EMAILWIRE.COM, January 24, 2011 ) New York, NY -- Barnes & Noble, Inc. (NYSE: BKS) reported third fiscal quarter results below analysts' estimate and announced the Board's decision to suspend its quarterly dividend payment of $0.25/share on Tuesday.

The Company posted an increase of 4.55% year over year in its revenue of third fiscal quarter of $2.3 billion from $2.2 billion in the same quarter last year, slightly below the street estimate of $2.39 billion.

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Net income for the third fiscal quarter declined 24.64% to $60.58 million or $1.00 per share from $80.4 million or $1.38 a share in the same quarter last year, which compares to guidance of $0.90-$1.20, and the consensus estimate of $1.13. This was down from $1.38 reported last year, primarily reflecting lower margin hardware sales and incremental investments.

EBITDA came in at $170 million versus guidance for $160-190 million. Retail comps finished third quarter up 7.3% versus initial guidance of 5-7%, after running up 9.7% for the holiday period. Online comps finished up 64% versus initial guidance of 75%, after running up 78% for the holiday period. College comps were down 2.2% versus guidance of flat to down 2%, negatively impacted by a higher mix of lower priced textbook rentals and weather.

Gross margins were down 190 basis points, including down over 300 basis points at retail, up slightly in college, and up 200 basis points online.

Management did not issue fiscal 4Q sales or earnings guidance, due to the uncertainty surrounding Borders' filing Chapter 11 and timing of its planned store closures. The company announced the Board's decision to suspend its quarterly dividend payment of $0.25/share. Management noted that the $60 million annual expense will be used to further invest in digital initiatives, as well as some potential real estate opportunities associated with the Borders' store closings.

Shares of a bookseller went down by $2.67 or 14.35% to $15.94 after opening at $16.81 and trading in the range of $15.62-$17.58. 2.45 million Shares has been traded compared to the daily average of 0.514 million shares. The market capitalization of the stock stands at $960.07 million with beta of 1.21. The 52 week range of the stock is $11.89-$24.71.

The Company is a content, commerce and technology company that provides customers access to books, magazines, newspapers and other content across its multi-channel distribution platform.

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