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Barnes & Noble Posts Worse Q2 Loss; Guidance Falls Well Short of View (BKS)

Book seller Barnes & Noble, Inc. ( BKS ) on Tuesday posted much worse-than-expected second quarter earnings results, and its guidance also badly missed analyst estimates.

The New York-based company reported a fiscal second quarter net loss of 22 cents per share, compared with the average Wall Street analyst estimate for an 8 cent per-share loss.

Revenue for the quarter was $1.91 billion, which also missed the consensus estimate of $1.98 billion.

The company noted that comparable-store sales were down 3.3% from last year, but Barnes & Noble.com comps jumped 59%.

Looking ahead, the company forecast third quarter earnings to range from 90 cents to $1.20 per share, which will fall well short of current analyst estimates for $1.29 per share. For the full year, BKS estimated a net loss of 75 cents to $1.15 per share, while analysts expect a much smaller loss of 40 cents.

Barnes & Noble shares plunged 62 cents, or -4.2%, in premarket trading Tuesday.

The Bottom Line

We have been avoiding shares of BKS since our early June 2008 coverage began, when the stock was trading at $27.31. The company has an unsustainable 6.72% dividend yield, based on last night's closing stock price of $14.87. The stock has technical support in the $12-$14 price area. If the shares can firm up, we see overhead resistance around the $17-$18 price levels. We would remain on the sidelines for now.

Barnes & Noble, Inc. ( BKS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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