Forbes: Barnes & Noble's NOOK Bet Paying Off - Page 2

SensualPoet · 08-30-2011, 07:00 PM

Barnes and Noble continue to have some challenges. This was the quarter May 1 to Jul 30; store sales (700 locations), and college sales (650 locations), were down about 2% vs a year a go. Losses were $56 million vs. $65 million. Yes, the Nook Division (which is Nook hardware and digital content) was up from $115 to $277 million, year over year. So, yes, they sold $162 million more of Nook stuff but net-net the enterprise only lost $9 million less.

B&N makes profit only one quarter per year: Nov 1 to Jan 31 so losses in this quarter (Q1 May 1 to Jul 30) is expected. Less settling is B&N will almost certainly have a very challenging Q2 (Aug 1 to Oct 31) since a lot of air will be sucked out of the market as consumers rush Borders stores for bargains.

Last year, B&N lost $74 for the full year (end Apr 30); it is already predicting losses for full year 2012. It did sells $204 million in shares to Liberty Media in Aug but it cost them $15 million to do it ... netting $189 million. And, of course, B&N no longer pays its shareholders a nickel because it can't afford to. Your return on investment is strictly a gamble on future capital gains. A year ago, you were earning 25¢/share dividend and the stock was work $16.50; had you bought the stock then you'd have lost 20% of your investment. The good news is the stock as trading under $10 two weeks ago. Had you bought the stock two years ago, you'd have lost 50% of your money.

The next 12 to 18 months are not so much growth as stabilisation and it may be the Liberty Media cash infusion will help that by buying time and accelerating modestly Nook expansion.

But make no mistake that Amazon's tablet is intended to crush Nook Color, shoving the $139 Nook Touch into the bargain basement area to fight out the new Sony and Kobo devices which have similar capabilities and the $114 Kindle with Offers and its successor. As I say: challenging.

stonetools · 08-30-2011, 09:13 PM

B&N really bet the company on the Nook and e-books . I hope their gamble pays off in renewed profits.

OtterBooks · 08-31-2011, 12:00 AM

Quote:

Originally Posted by SensualPoet

Less settling is B&N will almost certainly have a very challenging Q2 (Aug 1 to Oct 31) since a lot of air will be sucked out of the market as consumers rush Borders stores for bargains.

I went to one of the Borders closing sales. I was like wow, Amazon prices!

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08-30-2011, 07:00 PM	#16
SensualPoet Wizard Posts: 2,302 Karma: 2607151 Join Date: Nov 2009 Location: Toronto Device: Kobo Aura HD, Kindle Paperwhite, Asus ZenPad 3, Kobo Glo	Barnes and Noble continue to have some challenges. This was the quarter May 1 to Jul 30; store sales (700 locations), and college sales (650 locations), were down about 2% vs a year a go. Losses were $56 million vs. $65 million. Yes, the Nook Division (which is Nook hardware and digital content) was up from $115 to $277 million, year over year. So, yes, they sold $162 million more of Nook stuff but net-net the enterprise only lost $9 million less. B&N makes profit only one quarter per year: Nov 1 to Jan 31 so losses in this quarter (Q1 May 1 to Jul 30) is expected. Less settling is B&N will almost certainly have a very challenging Q2 (Aug 1 to Oct 31) since a lot of air will be sucked out of the market as consumers rush Borders stores for bargains. Last year, B&N lost $74 for the full year (end Apr 30); it is already predicting losses for full year 2012. It did sells $204 million in shares to Liberty Media in Aug but it cost them $15 million to do it ... netting $189 million. And, of course, B&N no longer pays its shareholders a nickel because it can't afford to. Your return on investment is strictly a gamble on future capital gains. A year ago, you were earning 25¢/share dividend and the stock was work $16.50; had you bought the stock then you'd have lost 20% of your investment. The good news is the stock as trading under $10 two weeks ago. Had you bought the stock two years ago, you'd have lost 50% of your money. The next 12 to 18 months are not so much growth as stabilisation and it may be the Liberty Media cash infusion will help that by buying time and accelerating modestly Nook expansion. But make no mistake that Amazon's tablet is intended to crush Nook Color, shoving the $139 Nook Touch into the bargain basement area to fight out the new Sony and Kobo devices which have similar capabilities and the $114 Kindle with Offers and its successor. As I say: challenging.

08-30-2011, 09:13 PM	#17
stonetools Wizard Posts: 2,016 Karma: 2838487 Join Date: Oct 2010 Location: Washington, DC Device: Ipad, IPhone	B&N really bet the company on the Nook and e-books . I hope their gamble pays off in renewed profits.

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